Hong Kong (Agencies): Global markets plunged on Monday, deepening a global stocks rout triggered by US President Donald Trump’s trade war and China’s forceful response to unexpectedly high tariffs.
Germany’s Dax opened down 9%, while London’s FTSE was about 5% lower. European markets were, on the whole, faring better than Asian markets in early trade. Japan’s benchmark Nikkei 225 index closed 7.9% lower, while the broader Topix finished down 7.7%. Tech giant Sony plummeted more than 10%.
In mainland China, where markets reopened after a public holiday, the Shanghai Composite Index closed more 7% lower. The blue-chip CSI300 index also lost about 7%. In Hong Kong, the benchmark Hang Seng index last traded just under 12% lower. Chinese tech giants Alibaba and Tencent were each down more than 14% and 10% respectively.
“Washington’s shock decision to impose a 34% tariff on Chinese goods dealt a direct blow to core export sectors like semiconductors and EVs (electric vehicles), triggering a sharp and broad-based repricing across Asian markets,” Dilin Wu, a research strategist at Pepperstone, wrote in a research note.
Trading volumes in Hong Kong surged on Monday, which she said was “a clear sign of widespread forced liquidations and what can only be described as a full-blown panic.”
Asian markets are tracking the worst two-day stretch for Wall Street stocks in five years. US stock futures plunged Sunday evening after two sessions of sell-offs that wiped away over $5.4 trillion in market value.
US stocks fell sharply on Friday after China retaliated fiercely, imposing a 34% tariff on all US goods, raising fears of an escalating and damaging trade war fueled by continuing trade tension between the world’s two largest economies.
A commentary published Sunday by the People’s Daily, the ruling Chinese Communist Party’s official mouthpiece, stressed that the country has a “strong capacity to withstand the pressure” in the face of “US tariff bullying.”
“Faced with America’s reckless tariff punches, we know exactly what we’re dealing with, and we have plenty of countermeasures at hand,” it said. “After eight years of trade war with the US, we’ve built up a wealth of experience in this struggle.”
China’s retaliation last week against the latest round of US tariffs was more sweeping than its earlier reciprocal actions and marked a significant escalation in its response, which triggered widespread market turmoil.
Taiwan’s Taiex closed down 9.7% on Monday. Almost all Taiwanese stocks, including TSMC and Foxconn, two of the island’s best-known export powerhouses, triggered circuit breakers, according to Taiwan’s Central News Agency. Both TSMC and Foxconn fell about 10%.
Oil prices continued to slide Monday following last week’s losses. Brent futures, the global benchmark, dropped more than 2.4%, while US West Texas Intermediate crude futures, the US benchmark, declined by 2.5%.
In Australia, the benchmark ASX 200 index closed 4.2% down, while New Zealand’s NZX 50 – the first indices to close in the region on Monday – ended the day 3.7% lower. South Korea’s Kospi finished 5.6% lower. The country’s tech powerhouse and major growth driver Samsung tumbled more than 5%.
Even gold is being sold off. Traditionally considered a safer financial bet, gold has dropped by more than 4% to around $3,030 an ounce since Thursday.