Market Downturn in Asia-Pacific Following U.S. Trade Policies
Asia-Pacific markets experienced a decline on Monday, mirroring losses in U.S. stock futures as investor sentiment weakened due to tariff concerns. The dip in confidence came ahead of key economic data releases, with concerns surrounding potential trade policies further unsettling markets.
Reports suggest that the U.S. administration is set to impose a sweeping 25% tariff on all steel and aluminum imports, a move that has heightened fears of escalating trade disputes. Japan’s Nikkei 225 fluctuated and remained flat, while the broader Topix index recorded a 0.16% loss in volatile trading. The country’s loan growth stood at 3% year-over-year in January, a marginal decline from December’s 3.1% growth.
South Korea’s Kospi index also traded flat in unstable conditions due to tariff concerns, while the small-cap Kosdaq index advanced by 0.83%. Australia’s S&P/ASX 200 slipped by 0.4%, reflecting the cautious stance of investors. Meanwhile, Hong Kong’s Hang Seng index moved against the broader trend, gaining 1.43%, while China’s CSI 300 index remained unchanged.
Economic Data and Market Reactions Across Asia
In China, consumer inflation rose to a five-month high in January, driven by increased spending leading up to the Lunar New Year. Data from the National Bureau of Statistics revealed that the consumer price index (CPI) increased by 0.7% month-over-month and 0.5% annually, surpassing the estimated 0.4% increase. However, China’s producer price index (PPI), which measures wholesale price trends, fell by 2.3% year-over-year, exceeding the anticipated 2.1% decline.
Investors also monitored movements in the Indian stock market, which recorded declines on Friday amid tariff concerns and following an expected interest rate cut by the Reserve Bank of India—the first in five years. The downward momentum continued into Monday’s session, with the Nifty 50 index dropping by 0.54% and the BSE Sensex falling by 0.34%.
Singapore’s benchmark Straits Times Index (STI) bucked the broader downward trend, hitting an all-time high of 3,910.12 points, according to LSEG data. The gains were driven by strong performances from Singapore Telecommunications and local banking giants DBS Group Holdings, Oversea-Chinese Banking Corporation, and United Overseas Bank. The STI was trading up 0.7% during the session.
Wall Street Losses Add to Market Pressure
The downward trend in global markets was further fueled by Wall Street’s weak performance on Friday. The three major U.S. stock indexes fell due to tariff concerns after the U.S. leadership signaled the intention to impose reciprocal tariffs on trading partners. Additionally, new economic reports revealed signs of rising inflation, with consumer sentiment and job data indicating a potential increase in prices. The 10-year Treasury yield climbed above 4.5% at its session high, adding to market concerns.
The Dow Jones Industrial Average declined by 444.23 points (0.99%) to close at 44,303.40. The S&P 500 slipped by 0.95% to 6,025.99, while the Nasdaq Composite saw the sharpest drop, losing 1.36% to settle at 19,523.40. These losses placed all three major indexes in negative territory for the week, reflecting heightened uncertainty in the financial markets.
