Asian markets slip: Tariff talks cloud investor sentiment; US-China talks cast shadow
Asian markets broadly declined on Tuesday, as initial optimism surrounding newly proposed trade agreements with Japan and the
European Union
by US President
Donald Trump
began to fade.
Japan's Nikkei 225 slipped nearly 0.7 per cent to 40,725.23, while Australia's S&P/ASX 200 edged down 0.3 per cent to 8,670.50.
South Korea's Kospi managed to recover from earlier losses, ending flat with a marginal gain of less than 0.1 per cent at 3,212.59.
In China, Hong Kong's Hang Seng Index dropped 1.1 per cent to 25,276.36, and the Shanghai Composite fell 0.3 per cent to 3,586.93.
Analysts said investors turned cautious as attention shifted to ongoing trade discussions between the US and China. US Treasury Secretary Scott Bessent met with Chinese Vice Premier He Lifeng in Sweden, though no major breakthroughs were reported.
Bessent suggested that existing tariff levels would likely remain in place.
'Aside from addressing economic imbalances, tariffs are also now well entrenched in the geo-political arena,' said Tan Boon Heng of Mizuho Bank's Asia & Oceania Treasury Department.
Trump recently unveiled a new trade framework with Japan, proposing a 15 per cent import tax- lower than the previously floated 25 per cent. Under the deal, Japan agreed to invest $550 billion in the US and expand access to its automotive and rice markets, though finer details are still pending.
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Meanwhile, the US and the EU struck a deal to impose 15 per cent tariffs on cars and other goods, again lower than earlier threats. Despite the announcements, many trade details remain unresolved, keeping investors on edge. US markets ended Monday relatively stable, with investors awaiting the Federal Reserve's upcoming interest rate decision on Wednesday. Wall Street broadly expects the Fed to delay any rate cuts until September, although some Trump-appointed officials could dissent.
The Fed has held rates steady throughout 2025 following a series of reductions late last year.
Tech Rally Drives Momentum
Technology and AI-linked stocks continued to lead the market. Tesla shares jumped 3 per cent after it announced a potential $16.5 billion semiconductor deal with Samsung Electronics. Samsung's stock in Seoul surged 6.8 per cent.
Chipmakers saw broad gains following Alphabet's announcement of an $85 billion investment in AI chips and related initiatives.
Advanced Micro Devices climbed 4.3 per cent, while Super Micro Computer surged 10.2 per cent.
However, not all earnings updates impressed. Revvity shares plunged 8.3 per cent despite beating quarterly earnings expectations, as its full-year forecast fell short of analyst estimates. The result weighed on broader sentiment.
Investors are watching closely as nearly one-third of S&P 500 companies are due to report quarterly results this week.
Strong earnings are seen as critical to justifying recent stock rallies, which have been partly fuelled by tariff relief hopes. Some analysts, however, remain sceptical about elevated valuations without corresponding profit growth.
Commodities and currency moves
In energy markets, US crude edged up by 1 cent to $66.72 per barrel, while Brent crude added 6 cents to $70.10.
On the currency front, the US dollar strengthened slightly to 148.56 Japanese yen from 148.54 yen. The euro ticked up to $1.1600 from $1.1593.
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