Asian Stocks Sink as Trump Hikes China Tariffs to 104%; RBI Decision in Focus

Asian equity markets plummeted on Wednesday as trade tensions escalated sharply following U.S. President Donald Trump’s latest tariff hike targeting Chinese imports. The move sparked widespread losses across key indexes in Japan, Hong Kong, South Korea, and Australia, while investors awaited the Reserve Bank of India’s (RBI) rate decision later in the day.

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🔺 Trump’s Tariff Surge Reignites Global Trade War Fears

President Trump signed an executive order on Wednesday imposing a staggering 104% total tariff on Chinese goods—increasing reciprocal tariffs to 84% on top of the already-existing 20% duties. These new levies were scheduled to take effect at 04:00 GMT.

In response, China pledged to “fight to the end”, warning of countermeasures if the U.S. moves forward. The escalation of this tit-for-tat trade war between the world’s two largest economies has shaken investor confidence globally, particularly in Asia.

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📉 Asia Market Summary – Key Index Losses

• 🇯🇵 Japan’s Nikkei 225 slumped 3%, leading regional losses, while the broader TOPIX index fell over 2%.
• 🇭🇰 Hong Kong’s Hang Seng Index dropped more than 2%, pressured by losses in tech and auto stocks.
• 🇰🇷 South Korea’s KOSPI fell 1%, and is now officially entering bear market territory, having dropped 20% from its July 2024 high.
• 🇦🇺 Australia’s ASX 200 declined 1.2%.
• 🇸🇬 Singapore’s Straits Times Index slipped 1.8%.
• 🇮🇳 India’s Nifty 50 Futures dropped 0.4% ahead of the RBI’s interest rate decision, where analysts expect a 25 basis point cut.

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🏦 China Attempts Market Stabilization

Despite Trump’s tariff shock, Chinese markets remained relatively stable. This was largely due to intervention from state-owned financial entities. China’s central bank voiced support for Central Huijin Investment to increase its holdings in index funds, signaling re-lending support if needed.

• Shanghai Composite dipped slightly by 0.2%.
• Shanghai Shenzhen CSI 300 was flat as Beijing pledged to stabilize equities amid tariff-driven volatility.

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📌 What’s Next?

Markets remain highly volatile amid fears that an all-out trade war could drag the global economy into recession. Meanwhile, traders are watching closely for the RBI rate decision, which may offer some relief to emerging markets like India.

Stay tuned with DailyForex.pk for real-time updates on Asian stock movements, U.S. tariffs, central bank policies, and forex market impact.