New Zealand shares staged a rebound Tuesday as the US halted its tariffs on Mexican and Canadian goods in a move that temporarily averted a trade war.

The S&P/NZX 50 Index rose 0.7%, or 94.72 points, to close at 12,905.04.

Japan's Nikkei 225 climbed 1.2% and Hong Kong's Hang Seng rallied 2%. Australia's ASX 200 was flat.

US equities trimmed their losses overnight, with the Nasdaq Composite dropping 1.2%, the S&P 500 shedding 0.8%, and the Dow Jones Industrial Average down 0.3%.

Investors got a temporary reprieve after the US decided to pause the 25% tariffs on Mexico and Canada for a month as both nations pledged to tighten border controls.

China, meanwhile, has said it would refer the case to the World Trade Organization (WTO) after getting slapped with a further 10% tariff on exports to the US.

Analysts expect Beijing to respond cautiously to US tariffs and avoid a tit-for-tat escalation at least for the time being.

"Beijing's response so far has been muted, limited to threatened WTO action, suggesting that Xi Jinping sees room for negotiation and will hold off on significant retaliation for now," TS Lombard analyst Rory Green wrote in a Monday note.

In domestic news, New Zealand's approved new dwellings fell 5.6% to 2,478 in December 2024, following a 4.9% rise in the prior month, Stats NZ data showed Tuesday.

Barfoot & Thompson's home sales in Auckland totaled 700 properties in January, or roughly NZ$737.4 million, down 16% from the prior month's 833 sold properties, the real estate agency said.

In corporate news, Briscoe Group's (ASX:BGP, NZE:BGP) shares climbed about 2% after the company reported fiscal fourth-quarter sales of NZ$245.3 million, up from NZ$243 million a year earlier.

Elsewhere, the manager of Vital Healthcare Property Trust (NZE:VHP), Northwest Healthcare Properties Management, said it decided not to pursue restructuring under a dual-listed trust proposal following feedback from stakeholders.