Hang Seng, Nikkei Sink on Trump’s Tariffs; ASX Defies Global Slump – Weekly Recap

US Markets Sink as Tariff and Inflation Rattle Investors

Global markets reeled last week as tariffs reignited inflation fears and rattled risk sentiment. The Nasdaq Composite Index slid 2.59% in the week ending March 28, while the S&P 500 and the Dow dropped 1.53% and 0.96%, respectively.

President Trump shocked markets on March 26 with a 25% auto tariff on all US imports. Concerns over higher tariffs lifting inflation and spurring Fed hawkishness added to the unease. Fears of reciprocal tariffs on pharmaceuticals and tech deepened the risk-off mood.

A batch of economic data released on Friday weighed further on sentiment, capping a week of losses.

US Economic Data Revives the Hawks

Several US economic indicators shifted sentiment toward the Fed rate path and risk appetite:

• The Core PCE Price Index rose 2.8% year-on-year in February, up from 2.7% in January. Inflation accelerated even though US tariffs have yet to impact price trends.
• Michigan Consumer Inflation Expectations soared from 4.3% in February to 5.0% in March.

China Growth Outlook Offers Some Relief

Sentiment toward China’s economic outlook improved after Morgan Stanley revised its 2025 GDP growth projection to 4.5%, up from 4.0%. Despite the upward revision, the forecast fell short of China’s GDP target of around 5%. Beijing’s stimulus plans to boost consumption, including auto sales and distribution reforms, bolstered sentiment.

Hang Seng Index and Mainland China Markets Feel Tariff Heat

The Hang Seng Index extended its losing streak to three weeks, shedding 1.11%. Tariff fears mounted, sparking concerns of a US-China trade war. The US administration also blacklisted over 50 tech firms, aiming to curb China’s advancement in AI and supercomputers. Auto stocks were the hardest hit.

• The Hang Seng Technologies Index fell 2.36%, with BYD Electronic (00285.HK), NIO Inc. (09866.HK), and Li Auto (02015.HK) falling sharply.
• Conversely, Alibaba (09988.HK) and Baidu (09888.HK) posted modest weekly gains, while the Hang Seng Mainland Properties Index advanced 2.50% on Beijing’s policy pledges.

Brian Tycangco, editor/analyst at Stansberry Research, commented on the volatility:

“For all those who are constantly worried about China’s tech bull market coming to an end, a little bit of context. Markets don’t normally gain 40% in less than 3 months without some sort of correction. Especially when the world’s biggest stock market is behaving like it’s having a very bad hangover after partying for 2-1/2 years.”

Meanwhile, Mainland markets had a mixed week. The CSI 300 edged up 0.01% while the Shanghai Composite Index fell 0.40%.

For more analysis on the Hang Seng Index and global market trends, click here.

Commodities: Gold Surges, Iron Ore Rebounds

Commodities posted solid gains amid rising global uncertainties.

• Gold rallied 2.03%, hitting a record high of $3,087 before closing at $3,084 on safe-haven demand.
• WTI crude oil prices climbed, closing at $69.28, while iron ore snapped a four-week losing streak.

ASX 200 Rises Despite Global Headwinds

The ASX 200 bucked the broader market trend, rising 0.64%. Gains in banking, gold, and mining outweighed tech stock losses.

• Gold sector: Northern Star Resources Ltd. (NST) ended the week 2.31% higher.
• Banking sector: The Commonwealth Bank of Australia (CBA) rallied 3.32%.
• Mining sector: Rio Tinto Ltd. (RIO) gained 2.26%.
• Tech Sector: The S&P/ASX All Technology Index tumbled 3.46%.

Nikkei Index Falls on Tariff Concerns

The Nikkei Index fell 1.91% in the week. Bank of Japan caution about further rate hikes amid tariff policy uncertainties weighed on Japanese Yen demand. Despite USD/JPY advancing 0.35% to 149.815, tariff concerns outweighed currency benefits for exporters.

• Auto Sector: Nissan Motor Corp. (7201) tumbled 6.71%, while Honda Motor Co. (7267) plunged 7.85%. Japan is the second largest exporter of cars to the US.
• Tech sector: Tokyo Electron (8035) and Softbank Group (9984) fell 3.76% and 0.50%, respectively.

Looking Ahead: Key Events on the Radar

Investors will closely monitor upcoming economic data, central bank developments, and trade headlines. Key events include:

• US inflation: Markets will likely react to Friday’s Personal Income and Outlays report and US market losses.
• US Tariffs: Auto tariffs will be effective on April 3, while Trump could also impose reciprocal levies.
• Beijing Stimulus: Stimulus measures targeting consumption and domestic demand could mitigate tariff risks.
• Economic Data: China PMIs and the US Jobs Report.

Amid ongoing volatility, traders should monitor global macro trends and policy shifts to navigate risks. Get in-depth insights on Hang Seng movers here.