After not seeing global market turmoil for three days since the beginning of the Covid-19 pandemic, Asian stocks regained a mild measure on Tuesday, despite slightly increasing trade tensions caused by President Trump's tariffs.
Before the market opened in China, the government unlocked a series of measures to stabilize its stocks. Next, Hong Kong's stock price rose 2% the day after 13.2% fell 13.2%. Mainland China's benchmarks recovered after a significant drop the previous day.
In Japan, Japan's leading benchmark, Nikkei 225, scored 6%, recovering some of the losses over the past few days. The rise in sentiment follows comments made Monday by Treasury Secretary Scott Bescent.
Korea's Kospi Index rose by about 1.5%.
Markets around the world were not moved last week after Trump announced a wide range of new tariffs. This is a fairly high tax rate in dozens of other countries, along with a 10% basic tax on US imports. Countries respond with their own tariffs or threats of retaliation on US goods. China forced retaliation on Friday, matching the new 34% tariff with its own tariff on many American imports.
In the US, the S&P 500 fell 0.2% after turbulent trading in the US on Monday. S&P Futures showed how the market will function as it resumes for Wednesday's trading in New York, up 1.5%.
Wall Street executives and analysts are increasingly worried that escalating trade tensions could result in lasting damage to the global economy.
JPMorgan Chase CEO Jamie Dimon wrote in an annual letter to shareholders on Monday. Some banking economists have already predicted that the economy will fall into a recession later this year.
The 10.5% drop in the S&P 500 on Thursday and Friday was the worst two-day decline for the Index since the onset of the 2020 coronavirus pandemic.
Trump has mercilessly maintained his trade stance as new, high tariffs are set to come into effect Wednesday. On Monday, he issued a new ultimate to China, either retracting retaliatory tariffs against the US or faced a 50% extra charge from Wednesday.
However, China showed on Tuesday that it was not relentless.
Several government sectors and government-owned businesses have issued statements and pledged to “maintain smooth operation of the capital market.” And China's central bank, People's Bank of China, vowed to support Chuo Hu Cheng Investment, a division of China's sovereign funds fund.
Additionally, seven companies belonging to the Chinese Merchant Group, a large central government-owned company traded in Hong Kong, said they would accelerate plans to buy back some of their shares.
The move by what is known as the “national team” in China was reminiscent of the efforts Beijing made during the 2015 market crisis.
At the time, the Chinese government's efforts to raise stock prices came after false judgment measures to keep things calm after raising high prices. This time, Beijing's intervention appears to be chiming with a strategy by Chinese leader Xi Jinping, who presents his government as a stable, gentle, calm pillar against the global economic turmoil unleashed by Trump's tariffs.
Christopher Buckley and River Akira Davis contributed the report.
