Asian Markets Rebound as Trade War Tensions Persist
Asian markets showed resilience this Tuesday, recovering from a significant drop experienced the day before due to escalating trade war fears. This comes after U.S. President Donald Trump assured fair negotiations regarding tariffs. The Hang Seng index in Hong Kong rose by approximately 158 points by midday following its steepest decline since 2008, which was a drop of 132 points. Meanwhile, Tokyo's Nikkei index increased by 608 points, recovering from a near 8% plunge on Monday.
The Shanghai and Shenzhen stock exchanges also made gains after significant losses the previous day, with the Shanghai index rising by 0.91% and Shenzhen up by 0.42%. President Trump has threatened to impose additional tariffs amounting to 50% on Chinese goods if Beijing does not retract the tariffs it has placed on American products. In response, the Chinese Ministry of Commerce issued a statement this Tuesday, asserting that their countermeasures announced last Friday are entirely justified. They condemned the perceived coercive tactics of the U.S. and reiterated that there are no winners in a trade war, emphasizing that confrontational tactics are not the appropriate way to engage with China.
The Central Huijin Investment state fund in China declared its commitment to stabilizing equity markets, reaffirming plans to increase investments in exchange-traded funds after having already done so on Monday amid the sharp declines in both Hong Kong and mainland Chinese markets.
In Taiwan, the stock market began the day in the red, with the Taiex index dropping nearly 3% just moments after opening. This followed the market's largest single-day drop in history, which saw a decline of 9.7% related to ongoing trade tensions. Indonesia's main stock market index fell by over 9% shortly after trading resumed for the first time since March 28, leading to a brief market halt as per newly implemented regulations. The Indonesian exchange was closed for a local holiday last week.
Southeast Asian exchanges mostly opened lower, with Vietnam down by 5.04% and Thailand by 4.08%. Conversely, the Philippines’ and Malaysia’s markets started the day with slight gains of 0.204% and 0.030% respectively.
In the United States, Wall Street moderated its earlier declines, closing mixed with the Dow Jones Industrial Average dropping by 0.91% and the S&P 500 down by 0.23%. The Nasdaq, however, managed a minor increase of 0.1%, marking a substantial reduction in selling pressure compared to the day's initial trading activities.
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