Asian Stocks Surge as Trump Delays Tariff Hikes
On Thursday, Asian stock markets surged as investors expressed significant relief following President Donald Trump’s announcement to halt punitive tariffs on U.S. allies. This optimism persisted despite Trump’s move to increase duties on goods from China to 125 percent.
Stocks rallied broadly, mirroring the robust performance on Wall Street, following an announcement from the U.S. president that he would postpone for 90 days actions initiated earlier which caused turmoil in financial markets and led to concerns about a worldwide economic downturn.
Trump said he would keep in place a basic levy of 10 percent on dozens of countries but upped the ante in his brutal trade war with superpower rival China by hitting it even harder after it retaliated in kind at the weekend.
Trump made the decision because he said investors were "jumping a little bit out of line" as markets collapsed and US Treasuries -- considered the safest option in times of crisis -- were also showing signs of cracking on concerns about the world's top economy.
"People were becoming jittery and somewhat fearful," he mentioned additionally, alluding to a phrase used in athletics that signifies a decline in composure.
The additional tariffs imposed on Beijing were due to "the disrespect China has demonstrated towards global markets," according to Trump.
The president refuted the notion of making a U-turn, stating to journalists that "flexibility is essential."
Asian traders greeted the development positively, boosting equity markets across the area.
Hong Kong surged over four percent, marking its third consecutive day of increases following a steep decline of more than 13 percent on Monday, which was its biggest drop since the 1997 Asian financial crisis. Meanwhile, Shanghai rose by more than one percent.
Both markets have received additional backing from hopes that Chinese authorities will introduce new incentives to bolster the economy amid the tariff actions.
The official figures indicating yet another decline in consumer prices last month only fueled these expectations.
'Fear to euphoria'
The Nikkei in Tokyo saw an increase of over eight percent, while both Seoul and Singapore witnessed gains exceeding five percent. Meanwhile, Sydney and Jakarta experienced rises of more than four percent.
Taiwan's Taiex saw its greatest increase on record with a 9.3% gain, following Monday's unprecedented 9.7% decline, which had been its steepest drop ever.
Vietnam's shares, subjected to some of the highest tariffs, surged by 6.5%, while markets in Manila and Wellington also showed strong gains.
The top tech companies led the way, as Sony, Sharp, Panasonic, and SoftBank all saw their stocks rise by more than 10%. Meanwhile, airlines, automobile manufacturers, and gambling enterprises also benefited from robust investor interest.
Apple’s suppliers saw significant stock surges — Hong Kong-based AAC Technologies jumped 23 percent, while in Taiwan, Hon Hai increased nearly 10 percent.
"Asian markets are shifting gears—from dread to elation—thanks to President Trump’s offer of a 90-day truce, halting the cycle of mutual tariffs," noted Stephen Innes at SPI Asset Management.
The president's statement acknowledged the 'yippee' response to his groundbreaking policies, and frankly, that encapsulates it perfectly."
We've just seen one of the greatest comebacks ever — and now, we anticipate Asian investors, similar to those in North America, stepping up to seize this opportunity.
US Treasury yields slightly decreased following a successful sale of $38 billion in notes, as reported by Briefing.com.
This reduced stress on the bond market, which had sparked concerns that investors might be losing faith in the United States.
The chaos triggered by Trump's trade war is presenting a challenge for the US Federal Reserve as they weigh whether to reduce interest rates to shield the economy or maintain higher rates to combat the inflation some argue the tariffs will exacerbate.
The minutes from the central bank’s March meeting, published on Wednesday, revealed that members expressed concerns about “the bigger and wider scope of the tariff hikes that were declared or scheduled compared to what many of their business associates anticipated.”
That was prior to the president announcing his broad tariffs of up to 50 percent on both friends and foes — which have now been put on hold until July.
Several decision-makers mentioned that they might encounter challenging compromises if inflation turned out to be more enduring while the prospects for economic growth and job creation deteriorated, according to the minutes.
Oil prices edged down after a much-needed bounce of more than four percent on Wednesday. Still, both main contracts remain under pressure amid concerns about the global economy and its impact on demand.
Gold also rallied around two percent, while bitcoin put on more than six percent.
Key individuals at approximately 0230 GMT
Tokyo - Nikkei 225: Up by 8.3 percent to reach 34,353.17 (break)
Hong Kong - Hang Seng Index: Up 4.2% at 21,108.06
Shanghai - Aggregate: Increased by 1.6% to reach 3,236.06
Dollar/yen: FELL to 147.00 yen from 147.82 yen on Wednesday
Euro/dollar: Increased to $1.0970 from $1.0948
Pound/dollar: Increased to $1.2825 from $1.2810
Euro/pound: Increased to 85.54 pence from 85.45 pence
West Texas Intermediate: DOWN 0.6% at $61.98 per barrel
Brent North Sea Crude: Down 0.8% at $64.96 per barrel
New York - Dow: Increased by 7.9 percent to close at 40,608.45
London - FTSE 100: Down 2.9% at 7,679.48 (closing value)