Nikkei surged over 600 points or by nearly 2% on Tuesday after the US President hinted at lowering the tariff base on Chinese imports. This comes as a major relief for investors globally who were counting-in the adverse impact on the supply chain arising due to trade war tensions between the US and China.
Nikkei concluded the trading session above the 34,800 level mark. Other Asian markets followed cues, with the Hang Seng index jumping over 500 points or nearly 2.4%, and closed the day well above the psychological 22k mark.
“145% is very high and it won’t be that high,” Trump said while addressing the reporters in the Oval Office. “It won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.” As per the White House fact sheet, there is a whopping 245% tariff figure imposed on Chinese imports. While the initial tariff rate was lower, China's retaliatory move was not well received by the Trump administration, which eventually triggered a tit-for-tat policy stance.
Adding to the overall optimism was the US president’s move to ease tensions with the central bank. After previously taking an aggressive stance against Federal Reserve Chairman Jerome Powell, Trump stated that he has no plans to fire him. “I have no intention of firing him,” Trump said. “I would like to see him be a little more active in terms of his idea to lower interest rates,” he added.
Optimism on Wall Street
US markets also witnessed similar investor sentiment, as worries around trade tensions eased a bit. The Dow Jones Industrial Average and the S&P 500 index witnessed a sharp surge in momentum. Even the tech index, Nasdaq followed suit, starting Tuesday's trading session with a 500-point surge.
Healthy Q1 results by certain US companies also lifted the mood of the street. However, for tech stocks skepticism remains high. For instance, Elon Musk-owned EV firm, Tesla experienced a 71% drop in profit levels. Revenue figures also plunged to $19.34 billion, marking a 9% year-on-year decline. The figure was also far below the consensus estimates of $21.11 billion, as per LSEG data.
