Asian equities up slightly as RBA cuts cash rate to new all-time low

Stocks in Asia rose mainly on Tuesday, although gains were capped in a potentially disappointed hope that the central bank could take action to combat the impact of the coronavirus epidemic.

Mainland China stocks rose on the day, with the Shenzhen component increasing 0.9% to 11,484.21 while the Shenzhen composite gained 1.031% to around 1,888.92. Earlier in the session, the Shenzhen indexes gained more than 2% each. The Shanghai composite rose 0.74% to approximately 2,992.90. The Hong Kong Hang Seng Index was about 0.3% higher than its last trading hour.

In South Korea, the Kospigained 0.58% to close at 2014.14.15.

Elsewhere, however, the Nikkei 225 in Japan slipped 1.22% to close at 21,082.73 while the Topix fell 1.36% to end its trading day at 1,505.12.

Overall, the MSCI Asia excluding Japan index was up 0.84%.

The Reserve Bank of Australia (RBA) announced Tuesday a rate cut of 25 basis points to 0.5%, a new record. As a result of this decision, the Australian dollar surged to $ 0.6549 after experiencing a previous low of $ 0.6507.

"The overseas coronavirus epidemic is currently having a significant effect on the Australian economy, particularly in the education and travel sectors," said the governor of the RBA. , Philip Lowe, in a press release.

"The global coronavirus epidemic is expected to delay progress in Australia towards full employment and the inflation target. The Council therefore considered it appropriate to further relax the monetary policy to provide additional support for employment and economic activity, "said Lowe.

Commenting after the RBA announced its decision, Paul Bloxham of HSBC said the central bank "acted so quickly".

"I'm not sure the (political) monetary response will do the same, but it is obviously … the RBA felt it should somehow do it," said Bloxham, chief economist. for Australia, New Zealand and global commodities. at HSBC, "Street Signs" told CNBC on Thursday.

"The key question is going to be, globally, is this the way for many other central banks to follow?" He asked. "The RBA is leading the way in terms of … making a cut. I don't know how effective it will be."

In Malaysia, where the country has been hit by a recent wave of political uncertainty that has resulted in the unexpected appointment of a new Prime Minister, Bank Negara Malaysia cut its overnight policy rate by 25 points 2.5% base. It was the lowest in 10 years, according to Reuters.

The narrowing of gains at the regional level occurred after a Tuesday Reuters Report that the industrial powers of the Group of Seven are expected to issue a statement on Tuesday or Wednesday on tackling the impact of the coronavirus epidemic.

At present, this did not include any specific calls for new public spending or coordinated interest rate cuts by central banks, Reuters reported citing a G-7 official who said direct knowledge of the deliberations.

This happened while investors were waiting for a conference call between global finance ministers and central bankers to coordinate the financial and economic response to the coronavirus.

The conference call will be chaired by U.S. Secretary of the Treasury Steven Mnuchin and U.S. Federal Reserve Chairman Jerome Powell and is scheduled for Tuesday at 7 a.m.ET, according to Steve Liesman of CNBC. Representatives from the Group of Seven Industrialized Countries will participate in the conference. 39; call.

"I think the fact that we are even having the talk about stimulus is positive," said Manpreet Gill, head of investment strategy for fixed income, currency and commodities at Standard Chartered Private Bank.

Sill, Gill added that traditional monetary policy is a "blunt instrument".

"You are going to get more cash, you can get lower interest rates. This may be part of a good solution but it may not be enough in itself," he said on Tuesday. CNBC Squawk Box.

Overnight on Wall Street, the Dow Jones Industrial Aoyagesoareded 1,293.96 more points to close at 26,703.32 its largest move on a percentage basis since March 2009 and the largest point gain from the average of 30 stocks ever recorded . December 26, 2018 to close its trading day at 3090.23. TheNasdaq Composit also had its best day since 2018, up 4.5% to close at 8,952.16.

Investors were put into safety last week amid concerns over the economic impact of the rapid spread of the coronavirus outside of China, where the disease was first reported. Over 89,000 Cases have been confirmed to date worldwide with at least 3000 deaths linked to the virus. .

The US dollar index, which tracks the greenback against a basket of peers, was last at 97.444 after dropping from around 98 yesterday.

The Japanese yen strengthened to 107.93 for the dollar after a previous low of 108.53.

Oil prices were higher in the afternoon of Asian trading hours, the international benchmark Brent crude futures rose 0.92% to $ 52.38 a barrel while the contracts futures on US crude rose 1.43% to $ 47.42 a barrel.

CNBC's Fred Imbert contributed to this report.