Investing.com-- Most Asian stocks retreated on Wednesday after U.S. President Donald Trump threatened to impose more import tariffs on key sectors, while South Korean shares rallied to a five-month high on strength in technology.
But broader Asian losses were limited, as Chinese markets continued to rally on optimism over artificial intelligence and more government support.
Regional markets took middling cues from a mostly flat overnight session on Wall Street, although the S&P 500 did inch up to a record high. U.S. stock index futures rose slightly in Asian trade, appearing unperturbed by Trump’s new tariff threats.
Focus this week is on more cues from the Federal Reserve, as well as a string of key purchasing managers index readings.
Japan, HK stocks weaken as Trump threatens more tariffs
Japan’s Nikkei 225 and TOPIX indexes fell 0.4% and 0.3%, respectively. Hong Kong’s Hang Seng was the worst performer in Asia, losing as much as 0.7%.
Trump on Tuesday evening threatened to impose 25% duties on automobiles, pharmaceuticals and semiconductor imports, with his auto tariffs coming by as soon as April.
Trump did not specify a timeline for tariffs on drugs and chips, stating that he wished to give manufacturers more time to set up U.S. operations.
The move is the latest in the U.S. President’s agenda of using tariffs to further U.S. interests.
But markets clocked relatively smaller losses than seen in the past, reflecting some resilience towards Trump’s tariff threats. While the U.S. president has imposed higher tariffs on some sectors and countries over the past month, he has stopped short of imposing some of his more steep tariffs, sparking some hopes that the tariff threats will be more of a negotiating tactic.
South Korea’s KOSPI surges on tech strength
South Korea’s KOSPI was the best performer in Asia, rallying 1.8% to a five-month high.
The KOSPI has been on a tear over the past week, buoyed by hopes of improving political conditions in the country, as a trial against impeached President Yoon Suk Yeol came to a close.
The KOSPI also benefited from sustained bargain buying, after Yeol’s attempt to impose martial law in December had sparked steep losses in South Korean markets. But they now appeared to have recouped all of their recent losses.
Local chipmakers also benefited from positive sentiment towards AI, with SK Hynix Inc (KS:000660) and Samsung Electronics Co Ltd (KS:005930) rising between 2% and 4%.
Other major Asian markets advanced on Wednesday. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes surged around 0.7% each after President Xi Jinping met with key tech CEOs earlier this week. Beijing was also seen vowing more support for private industries.
Singapore’s Straits Times index rose 0.4%, even as index heavyweight United Overseas Bank Ltd (SGX:UOBH) fell 0.6% from record highs. But the lender clocked stronger-than-expected quarterly earnings and announced a $2.2 billion capital return.
Futures for India’s Nifty 50 index pointed to muted open, as local stocks struggled with the prospect of higher U.S. trade tariffs against India.