Shanghai, Sydney lead gains in Asia on oil rebound, RBA action

Asian stock markets traded mixed on Tuesday, as a rebound in crude oil prices brought mixed blessings, while a largely anticipated rate cut from the Reserve Bank of Australia (RBA) lifted Australian equities to near seven-year highs.

The RBA unveiled a 25 basis-point interest rate cut at its policy meeting, bringing rates to a fresh record low after holding them at 2.5 percent since August 2013, to prop up an economy hit by falling commodity prices.

"With growth continuing at a below-trend pace, domestic demand growth quite weak and unemployment moving higher, the RBA felt it necessary to cut rates. However, the statement didn't sound as dovish as many would have wanted to reinforce the idea of another rate cut," wrote Stan Shamu, IG market strategist, in a note.

"But given the pressure from other global central banks acting, [another rate cut] wouldn't be completely out of reach," he added.

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Meanwhile, the Reserve Bank of India (RBI) kept its key repo rate at 7.75 percent at its monthly meeting on Tuesday, after lowering rates by a quarter-point three weeks ago.

Gains in oil markets in early Asian trading, after clocking up gains of 11 percent in the prior two sessions, also lifted market sentiment. Brent crude traded at $54.97 a barrel, while U.S. WTI futures were at $49.94 a barrel.

Overnight, U.S. equities closed sharply higher following encouraging news from the euro zone. As a result, the Dow Jones Industrial Average closed up 1.1 percent, while the S&P 500 ended 1.3 percent higher. The Nasdaq Composite added 0.9 percent.

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CNBC 100

ASX rises 1.5%

Australia's key S&P ASX 200 index zoomed up to its highest level since June 2008, chalking up a nine-session winning streak, while the Australian dollar sank to a six-year low of $0.7648 against the greenback.

The resources sector advanced, with oil-related shares like Oil Search and Santos closing up 4.4 and 2.6 percent, while big miners like BHP Billiton and Rio Tinto gained 3.6 and 2 percent, respectively. Gold producers reversed losses, with Newcrest Mining rebounding 0.7 percent, after spot gold hovered above $1,270 an ounce on Tuesday.

The banking sector turned positive following the interest rate cut; ANZ led gains with a 2.2 percent rise, while National Australia Bank widened gains to 1.6 percent. Westpac and Commonwealth Bank of Australia recouped losses to trade 1.2 and 0.8 percent higher.

On the domestic data front, Australian approvals to build new homes in December fell 3.3 percent, after surging to a record high last month, figures from the Australian Bureau of Statistics showed. Meanwhile, the country's trade deficit stood at A$0.44 billion in December, compared with a shortfall of A$1.02 billion in November, the Australian Bureau of Statistics said Tuesday. The deficit was the smallest since the trade balance turned negative in April 2014.

Indian markets mixed

India's benchmark Sensex and the Nifty index traded near one-and-a-half-week lows amid choppy trade following the central bank's decision. The Indian rupee was at 61.74 per dollar.

Mainland indices up

China's benchmark Shanghai Composite index bolstered 2.5 percent to close at a two-week high, breaking a five-session losing streak, on the back of sharp gains in the energy and financial sectors.

After being sold-off in the previous session, China Life Insurance and China Pacific Insurance rallied 9 and 6.5 percent each. Haitong Securities and Citic Securities leaped 6.2 and 5.5 percent, respectively, while Founder Securities closed up 2.7 percent. China Minsheng Banking was up 2 percent in Shanghai and 0.6 percent in Hong Kong, after suffering steep losses on Monday following the resignation of its president over the weekend.

Energy plays like PetroChina also gained 4.2 percent, while Sinopec and China Oilfield Services advanced more than 2 percent each.

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In Hong Kong, the Hang Seng index inched up 0.2 percent. Chinese PC giant Lenovo jumped 7 percent after its third-quarter revenue rose 31 percent to $14.1 billion, beating expectations, as its smartphone division sales more than doubled.

Nikkei slips 1.3%

Japan's benchmark Nikkei 225 index widened losses to a fresh one-week low as the yen strengthened against the U.S. dollar. The bounce in oil prices also continued to hit airlines stocks as Japan Airlines and ANA Holdings closed down 5.2 and 1.6 percent each. Power companies, which rely heavily on oil and natural gas, also extended losses. Chubu Electric Power and Tokyo Electric Power lost 3.9 and 1.5 percent each.

Honda was in focus after the Nikkei reported that the carmaker was planning to scale back production at its Suzuka plant by 20 percent. Shares of the Japanese automaker retreated nearly 3 percent.

Earnings season continues in Japan, with the likes of Panasonic and Sharp due to hand in their corporate report cards. Shares of the two electronics majors notched up 0.7 and 5.6 percent.

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Kospi flat

South Korean shares finished modestly lower on Tuesday, recouping some losses from an intra-day low of 1,940 points amid choppy trade.

Kia Motors, the country's second-largest automaker, slumped nearly 3 percent after announcing a 1.8 percent on-year drop in sales for the month of January, affected in part by fewer working days at some of its overseas factories. Samsung Electronics, the heaviest weighted stock on the Kospi index, turned negative to finish 0.2 percent lower, while Hyundai Motor, Posco and Kepco made losses between 0.2 to 2.9 percent.

The energy sector continued to outperform the bourse in tandem with rising oil prices; S-Oil elevated 5.5 percent, while petrochemical stock LG Chem and SK Innovation bounced up 1.2 and 3 percent each. Hotel Shilla was the flavor of the day, closing up 4 percent after saying it was interested in acquiring U.S.-based in-flight duty-free retailer DFASS Group.