Asian stock markets presented a mixed close on Wednesday. Significant downturns were observed in Chinese and Hong Kong markets, prompted by U.S. President Donald Trump's indication of potential tariff impositions on the European Union and China. The rationale behind these tariffs, as articulated by President Trump at the White House, includes addressing trade inequities and curbing fentanyl trafficking—a lethal opioid permeating U.S. borders from China through Mexico and Canada. He announced the possibility of a 10 percent tariff on Chinese imports commencing February 1.
In response, the European Union's commissioner for the economy conveyed to CNBC that Europe would approach any tariffs levied by President Trump with proportionate measures.
Amidst this tariff uncertainty, the U.S. dollar maintained its strength during Asian trading, and gold prices remained elevated, holding above $2,750 per ounce. Conversely, oil prices faced a decline, attributed to fears of increased U.S. oil production in a market slated for oversupply this year.
In China, the Shanghai Composite Index registered a 0.89 percent decline, concluding at 3,213.62, amidst a backdrop of heightened tension between two major global economies. Similarly, Hong Kong's Hang Seng Index suffered a sharp 1.63 percent drop to 19,778.77, ending a six-day streak of gains, largely impacted by broad sell-offs in the technology sector due to Trump's announcement of a considerable private-sector investment strategy intended to surpass China in artificial intelligence.
Japan, however, saw market gains driven by President Trump's unveiling of a substantial $500 billion AI infrastructure initiative, in collaboration with firms like SoftBank, Oracle, and OpenAI. Consequently, Japan's Nikkei average increased by 1.58 percent, closing at 39,646.25, and the Topix index experienced a 0.87 percent uplift, settling at 2,737.19. Shares in SoftBank Group Corp soared by 10.6 percent, with Advantest and Tokyo Electron also climbing 4 percent and 1.7 percent respectively. The yen experienced a slight decrease following media speculation that the Bank of Japan could raise interest rates on Friday.
South Korean markets showed resilience, achieving over two-month peaks fueled by optimism regarding the region's technological sector. Notably, Samsung Electronics rose by 1.5 percent and SK Hynix leaped 3.4 percent, propelling the Kospi average to a 1.15 percent increase, closing at 2,547.06.
Meanwhile, Australia reported modest market improvements, achieving gains for a third straight session, particularly in technology and uranium stocks. The S&P/ASX 200 index edged up by 0.33 percent to 8,429.80, while the All Ordinaries index increased by 0.32 percent to 8,680.50. In New Zealand, the S&P/NZX-50 index slightly decreased by 0.12 percent to 13,037.14 following data revealing annual inflation figures exceeding the midpoint of the central bank's target range for the last quarter of the previous year.
U.S. stock markets concluded positively the prior night, buoyed by a dip in bond yields and tempered expectations surrounding Trump's Inauguration Day tariff policy announcements. The Dow advanced by 1.2 percent, the S&P 500 climbed 0.9 percent, and the Nasdaq Composite, focused on technology, rose by 0.6 percent.
