- greensea
- 05 Feb 2025 11:12 AM
- #Money & Investments
Asian markets showed a mixed performance today, with investors weighing the effects of new tariffs imposed by the United States and China. Japan's Nikkei 225 regained some ground, up by less than 0.1%, while Australia’s S&P/ASX 200 rose 0.5%. However, Hong Kong’s Hang Seng Index dropped by 1.2%, and China’s Shanghai Composite fell by 0.7%. South Korea’s Kospi, on the other hand, surged 1.1%, driven by bargain-hunting following recent market dips and positive momentum from Wall Street’s overnight rally.
President Donald Trump’s 10% tariff on Chinese imports continues to dominate market sentiment, with China retaliating by introducing its own tariffs on U.S. products, including coal and liquefied natural gas. A crucial 15% tariff on these products will come into effect on Monday, allowing time for potential negotiations between Trump and Chinese President Xi Jinping.
Despite concerns about a looming trade war, analysts suggest that tensions remain high but haven’t fully escalated. Stephen Innes, managing partner at SPI Asset Management, warned that markets should not ignore these risks, as trade disputes could spiral further.
On Wall Street, calm returned, with tech stocks leading the charge following a positive earnings report from Palantir Technologies. The S&P 500 gained 0.7%, the Dow Jones rose by 0.3%, and the Nasdaq climbed 1.4%. Trump’s decision to delay tariffs on imports from Canada and Mexico provided some relief to Wall Street, reinforcing hopes that his tough rhetoric on tariffs may be more about negotiation than long-term policy.
While concerns over a full-blown trade war persist, market experts emphasize the need for caution. Bank of America analysts noted that the equity market is seen as a barometer for the U.S. administration’s performance, with any policy moves that hurt risk assets likely to be swiftly reversed.
In other market news, Alphabet, the parent company of Google, saw a 2.5% rise in stock despite facing an antitrust investigation from China. Meanwhile, pharmaceutical giant Merck saw its stock plunge by 9.1% despite posting strong quarterly earnings, partly due to disruptions in its China shipments.
Bond markets saw a slight easing in Treasury yields following reports suggesting a slowing, but still healthy, job market in the U.S. Energy prices remained stable, with U.S. crude slightly down, and currency markets saw the U.S. dollar dip against the Japanese yen.
As global markets continue to navigate the impact of trade tensions, investors are advised to stay alert to potential volatility ahead.
