Trump tariffs, India, Nikkei 225

India markets slipped at the open as investors kept an eye on trade developments between the U.S. and the South Asian nation.

The benchmark Nifty 50 declined 0.42% while the BSE Sensex was down 0.31%. The Indian rupee weakened 0.15% against the dollar to 87.792 against the greenback.

India said it was being “targeted” by the U.S. and the European Union over its imports of Russian oil after U.S. President Donald Trump in an overnight social media post threatened New Delhi with much steeper tariffs.

—Lee Ying Shan

U.S. President Donald Trump will speak with CNBC’s “Squawk Box” at 8 a.m. ET Tuesday, where he will discuss the economy, jobs, the Fed, tariffs, and more.

Catch the full interview on air or livestream it on CNBC+.

India said it was is being “targeted” by the U.S. and the European Union over its imports of Russian oil after U.S. President Donald Trump in an overnight social media post threatened New Delhi with much steeper tariffs.

India began importing oil from Russia only after traditional supplies were diverted to Europe following the outbreak of the Russia-Ukraine war in 2022, the country’s foreign ministry said in a statement late Monday.

The ministry called out the EU and the U.S. saying, “it is revealing that the very nations criticizing India are themselves indulging in trade with Russia. Unlike our case, such trade is not even a vital national compulsion [for them].”

The EU’s bilateral trade with Russia stood at 67.5 billion euros ($78.1 billion) in 2024, while its services trade in 2023 was at 17.2 billion euros, according to European Commission data. Citing that data, India said the bloc’s trade was “significantly more” than India’s total trade with Russia.

Read the full story here.

—Lim Hui Jie

Mainland China and Hong Kong stocks inched higher, tracking gains in the region. Mainland China’s CSI 300 rose 0.32%, while Hong Kong’s Hang Seng Index added 0.24%.

— Lee Ying Shan

A few Bank of Japan board members said the central bank would consider resuming interest rate increases if trade friction de-escalates, minutes of its June policy meeting showed on Tuesday.

“Given high uncertainties, the BOJ would likely pause rate hikes for the time being. But it also must respond flexibly and nimbly, and return to a rate-hike phase depending on U.S. policy developments,” one member was quoted as saying.

At the June 16-17 meeting, the BOJ kept interest rates steady at 0.5% and decided to decelerate the pace of its balance sheet drawdown next year, signalling its preference to move cautiously in removing remnants of its massive stimulus.

Many members said the central bank must keep interest rates steady due to downside risks to the economy from U.S. tariffs, even though inflation was somewhat overshooting forecasts, the minutes showed.

“As wages had been solid and prices had been slightly higher than expected, the Bank would likely shift away from the current wait-and-see approach and consider resuming rate hikes, if trade friction de-escalates,” a few members were quoted as saying.

— Reuters

Japan’s Mitsubishi Heavy Industries shares rose more than 4% after it was chosen to build 11 new frigates for the Australian navy in a 10 billion Australian dollar ($6.5 billion) deal.

Mitsubishi Heavy Industries’s Mogami frigate was chosen over the MEKO A-200 frigate by Germany’s ThyssenKrupp Marine System.

The first three frigates will be built in Japan and scheduled to be delivered in 2029, while the remainder will be built in Western Australia. The warships, which are equipped for undersea warfare and air defence, will replace Australia’s Anzac-class frigates.

The decision was announced by Australia’s Deputy Prime Minister Richard Marles on Tuesday. “The upgraded Mogami-class frigate will help secure our maritime trade routes and our northern approaches as part of a larger and more lethal naval surface combatant fleet,” he added.

South Korea’s consumer prices rose 2.1% in July from a year earlier, slightly slower than the rise of 2.2% in June, government data showed on Tuesday.

On a monthly basis, the consumer price index rose 0.2%, the fastest in four months, after no change in the previous month.

The numbers were roughly in line with median forecasts of 2.13% and 0.22% tipped in a Reuters poll of economists.

— Reuters

Asia markets started the trading day in the green.

Japan’s benchmark Nikkei 225 was up 0.54%, while the Topix inched higher 0.45%.

South Korea’s Kospi gained 1.77%, and the small-cap Kosdaq rose 1.83%.

Australia’s S&P/ASX 200 gained 0.84%.

— Lee Ying Shan

The U.S.’ weak July jobs data report points to the “narrowing” of risk between U.S. and emerging markets assets, Derrick Irwin, senior portfolio manager at Allspring Global Investments told CNBC’s “Squawk Box Asia” Monday.

This comes amid a slowdown in the U.S. economy, “not only versus emerging markets, but in its own right,” Irwin said. “We’re likely to see rate cuts out of the Fed, which is not supportive of the dollar. And I think most importantly, we have an administration that has indicated that they would prefer a weaker dollar.”

He also noted that the actual economic impact of tariffs on emerging markets is “more limited than we think”, as a substantial amount of the U.S.’ imports are still exempted from new tariff rules.

Other drivers are making emerging markets an “interesting place to invest,” he said, citing China as an example. He expects to see a “continued, if rather slow move towards stimulating consumption,” which could mean “great opportunities,” particularly in the artificial intelligence sector.

India also shows promise despite the recent weakness in their stock market. “I think there’s opportunities to begin to pick up really great assets with a great long term story after that market softened a bit,” he noted.

Year-to-date, India’s benchmark Nifty 50 and the BSE Sensex index were up 4.58%, and 3.69% respectively.

A weaker U.S. dollar and falling global inflation have also given emerging markets an “incredible opportunity to begin cutting rates without damaging their currencies as much,” which can be “very stimulative” for their stock markets, Irwin said.

— Nicole Teo

Happy Tuesday from Singapore. Asia markets are poised for a mixed open.

Australia’s S&P/ASX 200 was set to start the day higher with futures tied to the benchmark at 8,701, compared with its last close of 8,663.70.

Japan’s benchmark Nikkei 225 was set to open higher, with the futures contract in Osaka last traded at 40,610 against the index’s last close of 40,290.70.

However, futures for Hong Kong’s Hang Seng Index stood at 24,708 pointing to a weaker open compared with the HSI’s last close of 24,733.45.

— Lee Ying Shan

All the three major averages soared into the green on Monday, with the Dow Jones Industrial Average recouping its losses from Friday’s session.

The blue-chip index climbed 585.06 points, or 1.34%, to finish the day at 44,173.64.

Additionally, the broad market S&P 500 and the tech-heavy Nasdaq Composite rocketed higher by 1.47% and 1.95%, ending at 6,329.94 and 21,053.58, respectively.

— Sean Conlon