Asian shares rallied Tuesday after China cut key interest rates as part of its effort to fend off malaise worsened by the trade war. Shares inChina's CATL,the world's largest maker of electric batteries, jumped about 13% in its Hong Kong trading debut after it raised about $4.6 billion in the world's largest IPO this year. Its shares traded in Shenzhen, mainland China's smaller share market after Shanghai, edged 0.1% higher after dipping earlier in the day. Australia's central bankon Tuesday reduced its benchmark interest rate by a quarter percentage for a second time this year, to 3.85% after inflation fell within a target range. China's central bank made its first cut to its loan prime rates in seven months in a move welcomed by investors eager for more stimulus as the world's second largest economy feels the pinch of highertariffsimposed by U.S. PresidentDonald Trump. The People's Bank of China cut the one-year loan prime rate, the reference rate for pricing all new loans and outstanding floating rate loans, to 3.00% from 3.1%. It cut the 5-year loan prime rate to 3.5% from 3.6%. With China's chief concern being deflation due to slack demand rather than inflation, economists have been expecting such a move. Data reported Monday showed theeconomy under pressurefrom Trump's trade war, with retail sales and factory output slowing and property investment continuing to fall. Tuesday's cuts probably won't be the last this year, Zichun Huang of Capital Economics said in a report. "But modest rate cuts alone are unlikely to meaningfully boost loan demand or wider economic activity," Huang said. Hong Kong's Hang Seng gained 0.9% to 23,542.46 early Tuesday, while the Shanghai Composite index edged 0.1% higher. In Tokyo, the Nikkei 225 climbed 0.5% to 37,685.09, while Australia's S&P/ASX 200 rose 0.6% to 8,343.30. South Korea's Kospi added 0.1% to 2,606.58, while the Taiex in Taiwan was up 0.4%. On Monday, U.S. stocks, bonds and the value of the U.S. dollar drifted through a quiet day afterMoody's Ratings became the lastof the threemajor credit-rating agenciesto say the U.S. federal governmentno longer deservesa top-tier "Aaa" rating. The S&P 500 picked up 0.1% to 5,963.60. The Dow Jones Industrial Average added 0.3% to 42,792.07, and the Nasdaq composite rose just 4.36 points to 19,215.46. Moody's pointed to how the U.S. government continues to borrow more and more money to pay for its expenses, with political bickering an obstacle to cuttingspendingorraising taxesorder to get the national debt under more control. The problems aren't new. Standard & Poor's lowered its credit rating for the U.S. government in 2011. The move by Moody's essentially warns investors globally not to lend to the U.S. government at such low interest rates, and the yield on the 10-year Treasury briefly jumped above 4.55% early Monday morning before falling to 4.45%. The yield on a 30-year Treasury bond briefly leaped above 5% before likewise receding. The downgrade by Moody's comes as Washington is set to debatepotential cuts in tax ratesthat could siphon away more revenue. If Washington has to pay more in interest to borrow cash, that could cause interest rates to rise for U.S. households and businesses, too, in turn slowing the economy. The downgrade adds to a long list of concerns on investors' minds, chief among them President Donald Trump's trade war. It has forced investors globally to question whether the U.S.bond marketand the U.S.dollarstill deserve their reputations as some of the safest places to park cash during a crisis. The U.S. economy has held up so far and hopes are high that Trump will eventually relent on his tariffs after striking trade deals with other countries. But big companies have been warning about uncertainty over the future. Walmart, for example, said recently that it will likely have toraise prices because of tariffs. That caused Trump over the weekend tocriticize Walmartand demand it and China "eat the tariffs." Walmart's stock slipped 0.1% Monday. In other trading early Tuesday, U.S. benchmark crude oil slipped 2 cents to $62.12 per barrel. Brent crude, the international standard, shed 7 cents to $65.47 per barrel. The U.S. dollar fell to 144.83 Japanese yen from 144.86 yen. The euro was unchanged at $1.1244.
