Quote from Alex bobby on April 8, 2025, 3:23 AM

Asian Markets Rebound After Turbulent Day, But Trade Tensions Still Loom

Asian stock markets staged a partial recovery on Tuesday after a chaotic start to the week, with Japan’s Nikkei 225 leading the rebound. The benchmark index surged over 6% in early trading, clawing back a significant portion of its nearly 8% loss from the previous day. By early afternoon in Tokyo, the Nikkei was up 5% at 32,691.34, signaling a more optimistic tone among investors—at least for now.

The relative calm seen across much of Asia on Tuesday contrasts sharply with Monday’s global market turmoil, triggered by renewed trade tensions between the United States and major economies like China and the European Union. However, markets in Thailand and Indonesia didn't share in the relief rally. These markets reopened after national holidays to steep losses, with Thailand’s SET index falling 5.7% and Indonesia's JSX index plunging over 9% at one point, prompting a temporary suspension in trading. By midday, the Jakarta market was still down 7.5%.

Taiwan Hit by Chipmaker Sell-Off

Taiwan's market also suffered, with the Taiex shedding 4.4%. A significant contributor to the drop was Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading chipmaker. TSMC's shares fell another 4% on Tuesday, adding to the 13.5% decline it has endured since U.S. President Donald Trump announced fresh tariffs—dubbed “Liberation Day” tariffs—on April 2. The tariffs, which many view as aggressive and sweeping, are shaking confidence in global supply chains, particularly those tied to the tech sector.

China Vows to Respond

As the markets opened in Asia, China’s Commerce Ministry issued a sharp rebuke of Trump’s latest tariff threats, stating it would “fight to the end” and implement unspecified countermeasures to protect its national interests. These strong words only added to the sense of unease surrounding future trade relations.

Despite the tensions, Chinese markets rebounded modestly. The Hang Seng Index in Hong Kong rose 1.6% to 20,140.78, although this barely dented the historic 13.2% plunge it experienced on Monday—the worst single-day loss since the 1997 Asian Financial Crisis. Mainland China's Shanghai Composite Index also gained 0.9% to close at 3,124.77.

Elsewhere in the Asia-Pacific region, South Korea’s Kospi inched up 0.1% to 2,331.80, and Australia’s S&P/ASX 200 gained 1.7% to 7,471.10. Markets in New Zealand and Australia also showed upward momentum, benefiting from the global search for stability.

Wall Street Whiplash and Investor Anxiety

Tuesday’s relatively calmer trading came after a rollercoaster session on Wall Street. On Monday, the Dow Jones Industrial Average plunged as many as 1,700 points before rallying by nearly 900 points in the late morning. The S&P 500 initially fell 4.7% before rebounding 3.4%, only to end the day down 0.2%. The Nasdaq composite managed to close slightly up by 0.1%.

The sharp intraday swings were partly driven by a false rumor suggesting that Trump was considering a 90-day pause on tariffs. Although quickly debunked by the White House as “fake news,” the mere possibility caused trillions of dollars’ worth of global investments to move. It also underscored just how desperate investors are for signs that the U.S. administration might soften its stance on trade.

But later statements by Trump made clear that more tariff increases were likely. He reiterated his aim of bringing manufacturing jobs back to the U.S., even if doing so means enduring short-term economic pain and prolonged negotiations with global trade partners.

Global Outlook: Volatility to Continue

The uncertainty surrounding global trade, particularly between the U.S. and China, remains a major concern for investors. While there is still hope that backdoor negotiations could prevent the full implementation of Trump’s proposed tariffs, confidence is waning. The latest rhetoric from both sides indicates that the path to resolution may be long and bumpy.

Other financial indicators also reflected growing economic anxiety. Oil prices, which fell below $60 per barrel on Monday for the first time since 2021, rebounded slightly. U.S. crude was trading at $61.60 per barrel on Tuesday, while Brent crude rose to $65.10. The fluctuation suggests concern over reduced global fuel demand amid slowing economic growth.

In currency markets, the U.S. dollar dipped to 147.78 yen, and the euro weakened to $1.0976. Meanwhile, gold prices jumped by $32 to over $3,006 per ounce, indicating a continued flight to safety by investors.

Bitcoin also saw a modest recovery, gaining 4.1% to $80,130. The digital asset had dropped below $79,000 on Monday, continuing its downward trend since hitting an all-time high above $100,000 in January.

Conclusion

While Tuesday brought some relief for Asian markets after Monday's global sell-off, the underlying tensions remain unresolved. Investor sentiment continues to be dictated by every word and policy move coming out of Washington. Until there's more clarity on the U.S. administration’s next steps in the escalating trade war, volatility will likely remain the norm across global financial markets.