Hang Seng Index: Tariff Uncertainty Pressures Tech and Property Stocks

US Equities Extend Gains on Trump’s Flip Flop

US equity markets posted gains on April 25, extending their winning streaks to four sessions, amid easing US-China trade tensions. The Nasdaq Composite Index rallied 1.26%, while the Dow and the S&P 500 gained 0.05% and 0.74%, respectively.

Tesla (TSLA) notably soared 9.8% on speculation that regulatory changes would advance the company’s self-driving technology ambitions.

An upward revision to preliminary consumer sentiment numbers also contributed to Friday’s gains. The Michigan Consumer Sentiment Index fell to 52.2 in April, up from a preliminary 50.8 but down from March’s 57. Consumer concerns about Trump’s trade policies and the economic outlook weighed on sentiment.

Friday’s US session helped set the tone for the Asian markets opening on Monday, April 28.

Tariff Developments Fuel Market Sentiment

News of Washington nearing trade agreements with Australia and Japan raised hopes of an end to tariffs for the two economies.

Fox Business Senior Correspondent Charles Gasparino reported that the Trump administration aimed to roll out trade deals during the week, though he cautioned that several moving parts could delay the timeline. Proposed deals included India, Japan, South Korea, and Australia.

However, US-China tensions persisted amid President Trump’s shifting signals on China’s tariffs.

CN Wire reported:

“Trump says China must make substantial concessions or tariffs will not be removed.”

Trump’s hardline stance on China dashed hopes of progress in trade negotiations, pressuring the Hang Seng Index and Mainland China equity markets.

Hang Seng Drops Amid Tariff Uncertainty

Asian markets had a mixed start to the Monday session as investors digested the latest tariff headlines. The Hang Seng Index fell 0.38% as trade uncertainty dominated market sentiment.

• Tech Stocks: Alibaba (09988.HK) and Baidu (09888.HK) advanced 1.90% and 0.40%, respectively, limiting the Hang Seng Tech Index’s losses to 0.28%.
• By contrast, the Hang Seng Mainland Properties Index slid 2%, reversing Friday’s gains.

Mainland China’s equity markets also trended lower. The CSI 300 slipped 0.02%, while the Shanghai Composite Index fell 0.09% in morning trading.

Further policy pledges from China to mitigate tariff risks helped limit the morning losses. Beijing will reportedly introduce fresh measures to deliver employment and economic stability with additional stimulus policies expected as China seeks a stronger negotiating position with the US.

Arthur Budaghyan, Chief EM/China Strategist at BCA Research, commented:

“China’s pain tolerance from the trade war is presently higher than that of the US. American households, businesses, and investors are not ready to tolerate the pain due to the trade war. Consequently, Trump is eager to conclude a trade deal with China soon. In this context, Beijing will drag its feet in trade negotiations to get a favorable outcome. Will Trump agree to a quick deal with China that is well below the initial expectations he and his administration had set?”

Nikkei 225 Climbs as USD/JPY Holds Above 143.5

Japan’s Nikkei 225 advanced 0.71% on Monday morning on rising hopes for a US-Japan trade deal. A softer Japanese Yen also contributed to the gains, with the USD/JPY pair remaining firm, holding above 143.5 after Friday’s upswing. A trade agreement coupled with a softer Yen would enhance the competitiveness of Japanese exports and strengthen corporate earnings.

Nissan Motor Corp. (7201) rallied 3.01%, while Honda Motor Co. (7267) rose 1.15%.

ASX 200 Follows Wall Street Higher

Australia’s ASX 200 rose 0.76% in morning trade, tracking gains from Wall Street. Banking and tech stocks led the advance, offsetting losses in the mining sector.

• ANZ (ANZ) and National Australia Bank (NAB) rallied 2.18% and 2.12%, respectively. 10-year US Treasury yields continued to retreat after Friday’s pullback, raising demand for high-yielding Aussie bank stocks.
• The S&P/ASX All Technology Index advanced 1.77%.
• However, mining giants BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) fell 0.84% and 0.33%, respectively, following Friday’s 1.41% slide in iron ore prices.

Outlook: Trade, Stimulus, and Central Bank Signals

While easing trade tensions may continue to drive near-term demand for risk assets, market direction remains closely tied to developments in US-China negotiations.

Beijing’s stimulus plans and global central bank policy signals will also influence investor sentiment. However, a lengthy US-China trade war risks disrupting global supply chains and fueling inflationary pressures.

Under the current market volatility, investors may benefit from strategies considering evolving tariff-related news and monetary policy shifts.

For deeper analysis, please refer to our latest market coverage.