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| Australia cuts interest rates to 1.75% ahead of budget | |
| (about 2 hours later) | |
| The Reserve Bank of Australia has cut its official cash rate by 25 basis points to a historic low of 1.75% from 2%, the first cut since May 2015. | |
| The bank cited lower-than-expected inflationary pressures as the reason for the cut. | |
| Data published last week showed inflation is at a record low - well below the target band of 2%-3%. | |
| The rate cut comes hours ahead of the federal budget for 2016-2017. | |
| "The board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting," said Reserve Bank of Australia Governor Glenn Stevens in a statement. | |
| Australia has been dealing with an economic slowdown, largely due to a drop off in mining investment, which had been a driver of the resource-rich economy. | |
| Small tax cuts and spending on health, infrastructure and education have already been foreshadowed or announced to be part of the budget. | |
| It is also seen as an unofficial election campaign launch. Prime Minister Malcolm Turnbull will dissolve parliament and call an early election on or before 11 May. | |
| Asian stock markets opened higher on Tuesday following positive trading sessions in the US and Europe. | |
| In Australia, the benchmark S&P ASX 200 has traded higher by 0.76% to 5,282.60 points. | In Australia, the benchmark S&P ASX 200 has traded higher by 0.76% to 5,282.60 points. |
| Property-related stocks are among the big gainers. But bank shares ANZ, Westpac and NAB have headed lower. | Property-related stocks are among the big gainers. But bank shares ANZ, Westpac and NAB have headed lower. |
| Meanwhile, in South Korea the Kospi has edged higher by 0.24% at 1,982.99 points. | Meanwhile, in South Korea the Kospi has edged higher by 0.24% at 1,982.99 points. |
| China is back from a long weekend and the Shanghai composite index has opened higher by 1% at 2,967.43. | China is back from a long weekend and the Shanghai composite index has opened higher by 1% at 2,967.43. |
| Chinese whispers | Chinese whispers |
| Investors have brushed aside a private survey which showed a mild contraction in China's manufacturing activity. The Caixin Purchasing Managers' Index (PMI) came in at 49.4 in April, compared with 49.7 in March. | Investors have brushed aside a private survey which showed a mild contraction in China's manufacturing activity. The Caixin Purchasing Managers' Index (PMI) came in at 49.4 in April, compared with 49.7 in March. |
| A reading below 50 indicates a contraction. The PMI tracks activities in factories and workshops. | A reading below 50 indicates a contraction. The PMI tracks activities in factories and workshops. |
| The data differs from China's state figures released at the weekend, which showed a reading of 50.1 for April, compared to 50.2 in March. | The data differs from China's state figures released at the weekend, which showed a reading of 50.1 for April, compared to 50.2 in March. |
| In Hong Kong the Hang Seng index has slipped lower, down 1.19% at 20,816.91. | In Hong Kong the Hang Seng index has slipped lower, down 1.19% at 20,816.91. |
| Markets in Japan are shut for three days of national holidays and will re-open on Friday. | Markets in Japan are shut for three days of national holidays and will re-open on Friday. |