EQUITIES
Asian stocks declined on Tuesday as traders weighed the potential impact of additional US tariffs on China, Mexico, and Canada, with the MSCI Asia Pacific Index down 0.5%. Japan, Taiwan, and South Korea led losses, with tech hardware and financials dragging the regional gauge. Chinese stocks recovered slightly after three days of losses amid expectations of potential fiscal easing from Beijing.
- President-elect Donald Trump's comments on imposing a 10% tariff on Chinese goods and a 25% tariff on goods from Canada and Mexico triggered market caution, particularly for export-driven companies. Defense stocks in South Korea and Japan also fell as reports suggested Israel and Hezbollah were nearing a cease-fire deal. Investors are now focused on the Federal Reserve’s upcoming meeting minutes and its preferred inflation gauge for further policy clues.
- US equity futures have erased earlier losses to trade flat to slightly higher, Dow and S&P futures are flat, while Nasdaq 100 futures are +0.06% after earlier being down 0.80%.
- Japanese equities are the worst performing market in the region today, as exporter trade lower on the tariff news. The TOPIX was 1.40% lower, while the Nikkei is 1.30% lower.
- Foreign investors have again been better sellers of South Korean equities today, although outflows look to be slowly with just $64m of outflows so far today, with healthcare and chemical names seeing the majority of the outflows.
- Tech stocks are mixed today, with the HSTech Index +0.43% led by Baidu after it jumped 5.40% on reports of its autonomous ride-hailing trial in Hong Kong, BBG Semiconductor Index fell 0.50% with Tokyo Electron leading the declines, last down 2.80%. Tech stocks have been trading in a range since mid August now.
Chart. Asia Tech Stocks Remain Rangebound
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