Markets across Asia-Pacific opened sharply lower, extending last week’s global sell-off
Asian stock markets plunged on Monday, extending a global sell-off sparked by US President Donald Trump’s new tariff hikes and China’s retaliatory measures.
Last week, Trump imposed a 10% baseline tariff on all imports and announced additional “reciprocal” duties on dozens of countries with what he called unfair trade imbalances. China responded with a 34% tariff on US goods, mirroring Trump’s levy. Other countries also signaled plans to impose retaliatory tariffs. The moves triggered fears of a trade war and a potential US recession, leading to a market rout that erased nearly $5 trillion in value off US stocks last week.
Japan’s Nikkei 225 index dropped nearly 9% in early Monday trading, its lowest since October 2023. It recovered slightly but was still down over 7% by midday. Japan’s bank stock index fell as much as 17%.
Hong Kong’s Hang Seng had plunged nearly 14% as of 7:30 GMT, while Shanghai’s Composite index was down 7.3%. Shares of Chinese tech giants Alibaba and Tencent dropped 17% and 12% respectively. Taiwan’s exchange fell almost 10% on opening – its largest one-day percentage and point loss on record. South Korea’s Kospi index dropped 5.5% and was briefly halted. Australia’s S&P/ASX 200 closed down 4.2%, marking its worst session since the Covid-19 pandemic.
The European markets also started the day with losses. The pan-European Stoxx 600 index, which tracks the 600 largest companies in Europe, slumped by over 6% at market open, to its lowest level since early December 2023. US markets also appeared headed for losses. S&P 500 futures slid 2.5%, with similar trends for the Dow and Nasdaq.
“Wherever we look this morning, it’s a bloodbath,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note to The Guardian. “The S&P500 is down by almost 4%... and the week hasn’t even started yet.”
US markets had already posted their worst drop since the 2020 Covid-19 crash last week, with the S&P 500 down 6%, the Dow off 5.5%, and the Nasdaq falling 5.8% at Friday close. Billionaire US investor Bill Ackman warned on X on Sunday that Trump had triggered an “economic nuclear war” which could hurt domestic economy, and urged him to reverse course.
Trump, however, defended the tariffs. Speaking to reporters aboard Air Force One late on Sunday, he said that while he is aware of the market sell-off and doesn’t “want anything to go down,” he will not ease on the tariffs.
“Sometimes you have to take medicine to fix something,” he stated. “What’s gonna happen with the market I can’t tell you… but I do wanna solve the deficit problem that we have with China, with the EU, and other nations. And they’re gonna have to do that.”
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