Asia report: Markets fall as US tariff concerns swirl
By Josh White
Date: Tuesday 25 Feb 2025
(Sharecast News) - Asia-Pacific markets fell on Tuesday, tracking losses on Wall Street as investor sentiment weakened following renewed tariff threats from US president Donald Trump.
Concerns over trade tensions weighed on equities, particularly in Japan, while the Bank of Korea's decision to cut interest rates added to the region's focus on economic uncertainty.
"Asian stocks experienced their largest decline in three weeks after US president Donald Trump proceeded with tariffs on Canada and Mexico and imposed restrictions on Chinese investments, which negatively affected risk appetite," noted TickMill market strategy partner Patrick Munnelly.
"The Trump administration is looking to strengthen semiconductor restrictions on China, building upon and broadening the Biden administration's initiatives to curtail Beijing's technological advancement, as reported by Bloomberg News on Monday.
"US officials have recently conferred with their counterparts from Japan and the Netherlands regarding the limitation of Tokyo Electron and ASML engineers from servicing semiconductor equipment in China, according to the report."
Munnelly pointed to reports that some officials from the Trump administration were looking to impose tighter controls on the volume and variety of Nvidia chips that could be sold to China without a license.
"Shares across the region dropped, with significant losses reported in Japan, Taiwan, and Hong Kong.
"In Asia, Treasury 10-year yields fell by three basis points to 4.4%, following a record high for gold on increased demand for safe-haven assets.
"Bitcoin, regarded as part of the 'Trump trade', also decreased alongside other cryptocurrencies."
Markets in the red across Asia-Pacific region
Japan's Nikkei 225 led the decline, dropping 1.39% to 38,237.79, with automakers among the worst hit.
Nissan Motor tumbled 8.02% amid ongoing fallout from its failed merger talks with Honda and concerns over Trump's planned tariffs on Canada and Mexico, which could significantly impact its North American sales.
Hitachi fell 8.49%, while Fujikura lost 7.5%.
The broader Topix index slipped 0.43% to 2,724.70.
Chinese markets also ended lower, with the Shanghai Composite down 0.8% to 3,346.04 and the Shenzhen Component falling 1.17% to 10,854.50.
Media and healthcare stocks led losses in Shanghai, with Zhejiang Daily Media Group plunging 10.02% and MicroPort Endovascular MedTech dropping 9.45%.
Hong Kong's Hang Seng Index declined 1.32% to 23,034.02.
Travel and consumer stocks faced heavy selling pressure, with Trip.com Group plummeting 11.92%, New Oriental Education losing 5.08%, and Meituan sliding 4.74%.
In South Korea, the Kospi 100 shed 0.69% to 2,617.39 after the Bank of Korea cut interest rates as expected.
Chemical company Kumyang fell 6.64%, while EcoPro Materials and LF Co both dropped more than 6%.
Australia's S&P/ASX 200 slipped 0.68% to 8,251.90, weighed down by steep losses in energy and consumer sectors.
Viva Energy Group sank 26.88%, while Domino's Pizza Enterprises dropped 10.47%.
In New Zealand, the S&P/NZX 50 fell 1.79% to 12,307.27, with Ryman Healthcare plunging 23.01% as it resumed trading after a halt on Monday.
Trading in Ryman's shares were suspended as the company announced it was looking to raise around NZD 1bn (£452.47m) at a deep discount in a bid to strengthen its balance sheet.
Currency markets saw mild movements, with the dollar last down 0.05% on the yen, trading at JPY 149.64, as it advanced 0.22% against the Aussie to AUD 1.5784, and gained 0.32% on the Kiwi, changing hands at NZD 1.7497.
Oil prices were mixed, with Brent crude futures last down 0.03% on ICE to $74.76 per barrel, while the NYMEX quote for West Texas Intermediate edged up 0.07% to $70.75.
Bank of Korea cuts rates ahead of final court hearing over president's impeachment
In economic news, South Korea's central bank lowered its benchmark interest rate by 25 basis points to 2.75% on Tuesday, marking its third reduction in four meetings as policymakers attempted to bolster a slowing economy.
The move, which brought rates to their lowest level since August 2022, aligned with market expectations and reflected concerns over weak domestic growth.
It came amid heightened political uncertainty as the Constitutional Court prepared for the final hearing in president Yoon Suk Yeol's impeachment trial.
Reporting by Josh White for Sharecast.com.
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