Asian stock markets staged a modest recovery on Tuesday, rebounding from the previous session’s steep losses driven by escalating global trade tensions.
Most regional stock indices saw sharp gains helped by an overnight bounce back in U.S. technology stocks, while some dip-buyers emerged after three days of sharp declines.
Major U.S stock indexes closed slightly lower on Monday, while the tech-heavy Nasdaq inched up. Futures tied to these benchmark indexes jumped in Asian trading on Tuesday.
However, investors were cautious due to an escalating global trade. U.S. President Donald Trump on Monday threatened more tariffs on China, which faced retaliatory vows from Beijing.
Japan stocks surge on tech boost, weaker yen
Japan’s Nikkei 225 index led the resurgence, soaring nearly 7%, after heavy declines in the previous three sessions.
The broader TOPIX index also experienced significant gains, rising more than 7%.
The rebound was bolstered by a weakening yen and a surge in technology stocks.
Chip-related companies such as Tokyo Electron (TYO:8035) and Advantest Corp. (TYO:6857) saw their shares jump over 10% and 12%, respectively. SoftBank Group Corp. (TYO:9984) also climbed over 12%, contributing to the market’s recovery.
The yen’s reversal from its recent gains alleviated pressure on Japanese exporters.
Trump threatens extra tariffs on China; Beijing vows to retaliate
President Trump further escalated tensions with Beijing on Monday by threatening to impose an additional 50% tariff on Chinese goods if China does not reverse its recent 34% tariff hike on American imports by April 8.
China responded swiftly, with its Ministry of Commerce saying it would "fight to the end" and implement countermeasures if the U.S. follows through.
China already faces a combined 54% tariffs, with the recent 34% reciprocal duties announced on April 2.
UBS estimates that if tariffs stay in place, China’s 2025 export growth could fall by 5 percentage points and GDP growth by 1.5 points. Revenues for A-share non-financial firms may drop by 2.4 points, with net profit growth slowing by 6 points due to weaker margins.
However, Chinese shares were higher on Tuesday after several Chinese state-owned firms pledged to boost equity investments, as Beijing moved to shore up markets rattled by U.S. tariff tensions.
China’s central bank said Tuesday it supported state-owned Central Huijin Investment in boosting its holdings of index funds and will offer re-lending support if needed to help stabilize markets.
The blue-chip Shanghai Shenzhen CSI 300 index rose 0.5%, while the Shanghai Composite gained 0.7%.
Hong Kong’s Hang Seng jumped as much as 3%, after plunging more than 15% in the previous session.
Australia shares rise 2%, Singapore stocks decline
Australia’s S&P/ASX 200 rose nearly 2%, rebounding from a one-year low reached on Monday.
Futures for India’s Nifty 50 indicated a sharp rise at open on Tuesday.
South Korea’s KOSPI rose 1%.
Bucking the regional trend, Singapore’s Straits Times Index extended declines, dropping more than 2%.
Source : Investing