Hang Seng Index and Nikkei 225: EV Rally, Yen Pressure, Stimulus in Focus

US Markets Tumble, Gold Hits Record High as Trump Targets Fed Chair Powell

US equity markets plunged on Monday, April 21, as fears over Fed independence triggered a flight to safety. The Nasdaq Composite Index extended its year-to-date losses, sliding 2.55%, while the Dow and the S&P 500 dropped 2.48% and 2.36%, respectively.

President Trump intensified his criticism of Fed Chair Jerome Powell and the Fed’s decision to maintain current interest rates, raising fears of political interference. Speculation over a possible attempt to remove Powell added to market jitters.

The US Dollar Index extended its losses going into the Tuesday, April 22, Asian session, reflecting investor unease.

Meanwhile, gold struck a record high of $3,495 in the Asian session, amid demand for safe-haven assets.

Hang Seng Holds Firm on Stimulus Hopes Despite US-China Tensions

In Asia, the Hang Seng Index slipped 0.04% on Tuesday morning. Tech stocks were a drag in the morning session, while auto sector data boosted demand for EVs and cushioned the downside.

CN Wire reported:

“China exported 1.54 million automobiles in Q1, up 16% Y/Y, exported 0.57 million in March, up 16% Y/Y.”

Notably, Beijing previously stated China does not export EVs to the US, suggesting tariffs would not impact EV makers.

Despite China’s escalation of trade tensions, hopes for fresh stimulus helped limit downside pressure.

• EV makers: NIO Inc. (09866.HK) and Li Auto Inc. (02015.HK) rallied 3.29% and 3.12%, respectively.
• Tech Stocks: The Hang Seng Tech Index fell 0.50% in a mixed session. Alibaba (09988.HK) gained 1.10%, while Baidu (09888.HK) declined 0.85%. However, JD.com tumbled 6.61% amid renewed concerns over food delivery sector competition.

Meanwhile, Mainland China’s equity markets edged higher, with the CSI 300 and the Shanghai Composite Index gaining 0.03% and 0.31%, respectively.

Nikkei 225 Falls as Yen Strengthens

Japan’s Nikkei 225 declined 0.33% on Tuesday morning. Risk-off sentiment drove demand for safe-haven assets, including the Japanese Yen, pressuring the USD/JPY pair and Japanese stocks. The USD/JPY fell 0.50% to 140.157 in morning trading. A stronger Yen could pressure demand for Japanese goods and hurt corporate earnings.

Notable movers included Nissan Motor Corp. (7201), which declined 0.32%, while Sony Corp. (6758) dropped 0.95%.

ASX 200 Steady as Commodity Stocks Shine

Australia’s ASX 200 slipped 0.01% in morning trade. Gains in mining and banking stocks helped offset losses in tech. A weaker US dollar supported commodity prices.

• BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) rose 1.14% and 0.95%, respectively, tracking overnight iron ore price gains.
• Northern Star Resources Ltd. (NST) rallied 2.95% as gold climbed toward $3,500.
• Meanwhile, the S&P/ASX All Technology Index slid 1.47%, mirroring the Nasdaq Composite Index’s decline.

Outlook: Trade, Stimulus, and Central Bank Signals

The escalation of the US-China trade war raises concerns over a global economic slowdown but hopes for Chinese stimulus could cushion the impact on regional equities. Investor sentiment will likely hinge on three key factors in the days ahead: further developments in US-China trade relations, Beijing’s potential domestic stimulus measures, and global central bank commentary regarding tariffs and economic prospects.

As volatility persists, investors should consider positioning strategies that reflect rising geopolitical risk. For deeper analysis, see our latest market insights.