Major equity markets across the Asia-Pacific region staged a strong rebound on Tuesday as investors bought into stocks after the rout in recent sessions. Gains in the region were led by Japan's benchmark Nikkei 225, which retreated from its one and a half year lows to skyrocket 6% today. Mirroring the trend, Hong Kong's Hang Seng index jumped 2%, China's Shanghai Composite gained 1% and South Korea's Kospi added 0.5%.
Local sentiments and bargain hunting from oversold territories were the major drivers that carried the recoveries seen across these Asian markets.
As for the top gainer Japan, hopes of a negotiation with US President Donald Trump over his tariff offensive sparked positivity among investors. This comes after Japanese Prime Minister Shigeru Ishiba stated that he urged Trump to reconsider his tariff plans while expressing disappointment over the action. Trump has imposed a 24% reciprocal tariff on Japan on top of an additional 25% auto duty.
These words from PM Ishiba bolstered hopes of the two allies negotiating their way out of Trump's heavy tariffs on the export-dependent Japan. US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are currently in discussions with Tokyo, suggesting White House' willingness to negotiate trade sanctions.
In addition, the sharp dive taken by the headline Nikkei and broader market Topix index since Trump's Liberation Day tariff announcement also gave headroom for investors to hunt for quality stocks at a bargain. Both the indices have roughly lost 13% since the tariff announcements.
Moving westside to Hong Kong and China, the Beijing government's support in the wake of trade tariffs aided sentiment.
China's Shanghai Composite index rebounded more than 1% while Hong Kong's Hang Seng jumped back over 2% in trade today. In the last session, the Shanghai Composite had slid more than 7% while the Hang Seng plummeted to its lowest levels since the 1997 Asian financial crisis.
President Trump threatened to levy additional 50% levies if Beijing did not back track on its retaliatory tariffs on the world's largest economy. However, the Chinese government took a hardlined stance and reiterated today that it will never accept the 'blackmail nature' of Trump's tariff threats.
“We advocate resolving disputes through dialogue and cooperation,” the Chinese government said, adding that it will not hesitate to defend its legitimate rights and interests.
Trump had slapped an overall 54% tariff on China which was met with a reciprocal move to impose 34% levies on US imports.
While major Asian markets did log in a strong bounceback, others like Thailand, Vietnam and Indonesia melted under the heat of selling.
Indonesia’s Jakarta Composite nosedived over 9% as trading resumed today following a temporary circuit breaker. Vietnam’s benchmark index slid more than 5% after returning from a holiday. Thailand’s benchmark SET index also slipped over 4% to its lowest level since March 2020.
The intense selloffs in these markets were also sparked by Trump's sweeping tariffs on these nations. Trump has slapped a 36% tariff on imports from Thailand, 32% on Indonesia and 46% on Vietnam.
