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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.

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 was at 61.74 per dollar.

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