SINGAPORE, March 25 — Asian stocks stumbled today, dragged by a slide in Chinese tech shares after a strong rally, while investors weighed the prospect of narrower-than-feared United States tariffs and the dollar hovered near three-week highs after upbeat economic data.
Investors have been focused on the impending reciprocal tariffs promised by US President Donald Trump and its impact on the global economy as trade war fears grip markets.
Trump said yesterday that automobile tariffs are coming soon even as he indicated that not all of his threatened levies would be imposed on April 2 and some countries may get breaks, suggesting some room for negotiations.
That led to an exuberant risk-on reaction overnight. The S&P 500 closed at its highest in over two weeks, while a rally in tech stocks led Nasdaq up over 2 per cent yesterday.
Asian stock bourses initially joined in on Tuesday morning but by mid-afternoon the relief rally looked set to fizzle out. MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.35 per cent lower ahead of the European open.
European futures were down 0.24 per cent, while S&P 500 and Nasdaq futures inched lower.
Charu Chanana, chief investment strategist at Saxo, said the high degree of uncertainty would make business planning extremely difficult.
“While markets can react to every tariff headline, businesses cannot. Businesses need clarity — and the lack of it could weigh on earnings soon,” Chanana said.
Kyle Rodda, senior financial markets analyst at Capital.com, said there was still a need to see the full detail of what the tariffs would entail, and whether they represented the full extent of the Trump administration’s “bid to shake up the global trading system”.
“I don’t think we are out of the woods completely yet.”
Hong Kong’s Hang Seng index fell 1.8 per cent, as tech stocks led a broad selloff, with Xiaomi’s US$5.5 billion upsized share sale triggering concerns about stretched valuations across the market.
“Xiaomi’s placement is only an ‘excuse’ for the market decline in general, after this round of a 6,000-point rally,” said Steven Leung, director of institutional sales at UOB Kay Hian in Hong Kong, referring to strong rally in Hang Seng this year.
The Hang Seng is up 17 per cent this year, still the best-performing major stock market in the world on AI bets after startup DeepSeek’s sparkling debut.
Data lifts dollar
The dollar hit a three-week high against the yen at 150.95, after jumping 0.9 per cent in the previous session, while hovering at its strongest since March 6 at US$1.0781 per euro after stronger-than-expected US economic data.
Data showed S&P Global’s flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 53.5 this month from 51.6 in February. A reading above 50 indicates expansion in the private sector.
The PMI would suggest the economy was regaining speed after hitting a soft patch halfway through the first quarter, but so-called hard data, including retail sales and the employment report, have hinted at cracks in the foundation of the economy.
The strong dollar also cast a shadow across emerging markets. Indonesian rupiah sank to its lowest level since June 1998 during the Asian financial crisis on mounting concerns over the country’s fiscal health.
Investor attention will now be on the size of the reciprocal tariffs to be announced next week as well as which countries will be targeted by the Trump administration.
Oil prices were little changed on Tuesday after rising 1 per cent in the previous session as investors weighed the impact of Trump’s announcement of tariffs on countries buying oil and gas from Venezuela.
Brent crude futures were up 2 cents at US$73.02. US West Texas Intermediate crude futures was flat at US$69.11.
Gold was steady at US$3,015.87 per ounce after a Federal Reserve official signalled a cautious stance on interest rate cuts this year.
— Reuters
