Asia stocks mixed: China shares dip on US trade woes; local CPI prints in focus

Published 02/04/2025, 10:27 PM
© Reuters.

Investing.com– Asian stocks were mixed on Wednesday with Chinese stocks falling on escalating U.S.-China trade tensions, while investors assessed stronger-than-expected inflation prints from South Korea and the Philippines.

U.S. stock index futures were lower in Asian trade with losses in technology stocks after underwhelming earnings from Google parent firm Alphabet (NASDAQ:GOOGL).

Chinese markets react to US trade tensions

Chinese markets resumed trade after a week-long Lunar New Year holiday, during which Trump imposed a 10% tariff on Chinese imports.

China’s Shanghai Composite fell 0.4% on Monday, while the Shanghai Shenzhen CSI 300 index lost 0.3%. Hong Kong’s Hang Seng index dropped 1%. 

China has announced retaliatory tariffs on U.S. goods, including a 15% levy on coal and liquefied natural gas, and a 10% tariff on crude oil, farm equipment, and certain vehicles. These tariffs are set to take effect on February 10, 2025.

Despite expectations for high-level discussions to defuse the situation, President Trump has stated he was in no rush to speak with Chinese President Xi Jinping. 

This stance suggests that a resolution to the escalating trade conflict may not be imminent, leaving markets and businesses uncertain about the future of U.S.-China economic relations.

The escalating trade tensions have raised concerns about a potential full-scale trade war between the world's two largest economies. 

Japan’s Nikkei 225 and TOPIX were largely unchanged, while Australia’s S&P/ASX 200 index gained 0.6%.

Indonesia’s Jakarta Stock Exchange Composite Index fell 0.5%, while futures for India’s Nifty 50 indicated a marginal drop at open.

Investors assess regional CPI prints, AI optimism drives gains

South Korea’s consumer prices increased by more than 2% year-over-year in January, marking the first time in five months that inflation has surpassed this threshold. 

The uptick was primarily attributed to a weakened local currency, which has elevated import prices.

The recent acceleration in inflation could prompt the BOK to consider maintaining its rates for another month despite an ongoing political crisis in the country.

South Korea’s KOSPI climbed 1.1% despite higher inflation as e-commerce stocks rallied on optimism around recent artificial intelligence breakthroughs.

In the Philippines, the annual inflation rate remained steady at 2.9% in January, due to slight increases in the prices of key food items and transport costs.

Conversely, the Bangko Sentral ng Pilipinas (BSP) has been on a path of monetary easing citing manageable price pressures and a medium-term inflation forecast within the 2%-4% target range.

The steady inflation rate in January may provide the BSP with the flexibility to continue its accommodative policy.

Philippine's PSEi Composite index jumped 1.7% on Wednesday on rate-cut bets.

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