Asian stocks slid on Thursday amid heightened concerns over rising U.S. interest rates and the impact of new trade tariffs announced by U.S. President Donald Trump. Hong Kong’s Hang Seng led losses, dropping 2.2% as an AI-driven rally in technology stocks began to lose steam. Trump’s plans to impose 25% tariffs on automobiles, pharmaceuticals, semiconductors, and potentially lumber rattled trade-sensitive markets across the region.
Japan’s Nikkei 225 fell 1.7%, with major automakers Toyota and Honda dropping over 2% each due to their heavy reliance on U.S. sales. The TOPIX index also shed 1.5%. South Korea’s KOSPI declined 0.6%, and Singapore’s Straits Times Index was down 0.1%. Australia’s ASX 200 lost 1.3%, pressured by the potential impact of U.S. tariffs on the country’s key commodity exports. Additionally, stronger-than-expected January employment data in Australia heightened concerns that the Reserve Bank of Australia will maintain a hawkish stance despite its recent rate cut.
Hong Kong’s technology-heavy Hang Seng Index was particularly affected by fading momentum from the AI sector, with internet giants Baidu and Alibaba declining 2% and 2.5%, respectively. Baidu’s weak earnings earlier in the week dampened investor enthusiasm, highlighting continued economic challenges in China.
Mainland Chinese markets, while also down, saw smaller losses amid expectations of more stimulus from Beijing. The People’s Bank of China left its loan prime rate at record lows, and Trump’s comment that a trade deal with Beijing remained possible offered some reprieve. The Shanghai Shenzhen CSI 300 fell 0.4%, while the Shanghai Composite dipped 0.2%.
China has been subject to increasing trade pressure following Trump’s imposition of 10% tariffs earlier in February. Investors remain cautious amid ongoing uncertainty surrounding trade and monetary policy across global markets.
