Asia-Pacific markets extended their sell-off Monday as fears over a global trade war sparked by U.S. President Donald Trump’s tariffs fueled a risk-off mood.
Hong Kong markets led losses in the region, with the Hang Seng Index declining 8.95%. Meanwhile, mainland China’s CSI 300 fell 5.41%.
Over in Japan, the benchmark Nikkei 225 lost 5.92% to hit an 18-month low while the broader Topix index plummeted 5.94%. Earlier in the day, trading in Japanese futures was suspended due the market hitting circuit breakers.
In South Korea, the Kospi index pared some losses and was last down 4.11%, while the small-cap Kosdaq declined 3.41%.
Australia’s S&P/ASX 200 also pared some losses to 3.78%. The benchmark slid into correction territory with an 11% decline since its last high in February, in its previous session.
U.S. futures dropped as investors’ hopes of the Trump administration having successful negotiations with countries to lower the rates were dashed.
Meanwhile, U.S. oil prices dropped below $60 a barrel on Sunday stateside. Futures tied to U.S. West Texas intermediate crude fell more than 3% to $59.74, their lowest since April 2021.
Trump’s top economic officials dismissed any fears of inflation and recession, declaring that tariffs would persist whatever markets may do.
Stocks in the U.S. sold off sharply last Friday, after China retaliated with fresh tariffs on U.S. goods, sparking fears of a global trade war that could lead to a recession in the world’s largest economy.
The Dow Jones Industrial Average dropped 2,231.07 points, or 5.5%, to 38,314.86 on Friday, the biggest decline since June 2020 during the Covid-19 pandemic.
The S&P 500 nosedived 5.97% to 5,074.08, its biggest decline since March 2020.
Meanwhile, the Nasdaq Composite, which captures many tech companies that sell to China and manufacture there as well, dropped 5.8%, to 15,587.79. This takes the index down by 22% from its December record, representing a bear market in Wall Street terminology.
