Hang Seng Index and Nikkei 225: Markets Rise on US Tariff Relief Signals

US Markets Extend Gains Amid Tariff Developments

On Monday, April 14, US equity markets extended their gains from Friday after the US administration announced tariff exemptions on selected electronic goods. The Nasdaq Composite Index gained 0.64%, while the Dow and the S&P 500 advanced 0.78% and 0.79%, respectively.

In the bond markets, 10-year US Treasury yields ended a five-day winning streak, falling to a low of 4.360% before settling at 4.384%.

While the tariff exemptions lifted risk appetite, looming fresh tariffs capped the upside. President Trump warned of fresh tariffs targeting semiconductors and the entire electronics supply chain in the interest of national security.

Commerce Secretary Howard Lutnick clarified the move to exempt tariffs on selected electronics, reportedly saying:

“So, what he’s doing is he’s saying they’re exempt from the reciprocal tariffs but they’re included in the semiconductor tariffs, which are coming in probably a month or two. So, these are coming soon. You shouldn’t think this is really outside of it. Really think of it as being included in the semiconductor space.”

Further sentiment support came from reports that President Trump may pause auto tariffs. The potential pause lifted risk appetite ahead of the Asian session on April 15.

Hang Seng Index Holds Early Gains

In Asia, the Hang Seng Index advanced 0.19% in early trade as investors considered the latest tariff developments.

• Tech stocks Alibaba (09988) and Tencent Holdings (00700) posted 1.29% and 0.13% gains, while Baidu (09888) dropped 0.12%.
• The EV sector posted mixed results, with NIO Inc. (09866) rising 0.36%, while Li Auto Inc. (02015) slid 2.64%.

Mainland China’s equity markets struggled for direction amid tariff uncertainties. The CSI 300 and Shanghai Composite Index slipped 0.06% and 0.07%, respectively.

Nikkei 225 Rallies on Auto Sector Relief

The Nikkei 225 jumped 1.10% on Tuesday morning as hopes of a pause in US auto tariffs supported auto stocks. The USD/JPY pair edged higher in the morning session, rising 0.14% to 143.202. A weaker Yen could bolster demand for Japanese goods and corporate earnings.

Automakers led the gains, with Nissan Motor Corp. (7201) and Honda Motor Co. (7267) rallying 3.76% and 3.98%, respectively.

ASX 200 Advances on Wall Street Gains

Australia’s ASX 200 gained 0.42% on Tuesday, extending Monday’s advance. Banking and mining stocks offset losses in gold and tech sectors.

• BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) rose 0.43% and 0.48%, respectively, as iron ore spot prices extended gains from Monday.
• Falling 10-year US Treasury yields buoyed demand for high-yielding Aussie bank stocks. Commonwealth Bank of Australia and Westpac Banking Corp. (WBC) advanced 1.14% and 1.25%, respectively.

Outlook: Trade and Central Banks in Focus

Looking ahead, tariff-related headlines will continue dictating market sentiment. Escalating US-China trade tensions present downside risks. However, potential fiscal support from Beijing could mitigate the impact on regional equities.

Meanwhile, investors will closely monitor central bank commentary. Insights into how trade policies might influence the US economic outlook and Fed rate trajectory. A more dovish Fed stance could bolster demand for risk assets.

In this environment, portfolio strategies that account for heightened trade-related volatility may prove increasingly valuable. Access our market analysis here.