Asian markets experienced a general uptick on Friday, reflecting a rally on Wall Street, as traders reacted positively to the announcement that US President Donald Trump's latest reciprocal tariffs are unlikely to take effect until April, allowing for further negotiations.
The president has introduced a series of stringent measures aimed at addressing what he perceives as years of unfair trade practices by other nations, which has heightened concerns about a potential trade war and prompted warnings of a possible inflation increase.
Despite these concerns, investor confidence remains relatively stable, bolstered by the belief that many of the proposed tariffs could be retracted through negotiations. Additionally, Trump's indication of plans to initiate peace talks between Ukraine and Russian President Vladimir Putin has contributed to a more optimistic outlook.
On Thursday, the Republican leader stated his intention to impose new reciprocal tariffs on trading partners, asserting that US allies often engage in trade practices that are "worse than our enemies," and described the European Union as "absolutely brutal."
"Any charges imposed on the United States will be reciprocated," he remarked. Meanwhile, Commerce Secretary nominee Howard Lutnick indicated that assessments regarding the targets of these tariffs should be finalized by April 1, with the possibility of implementation shortly thereafter, which has provided some reassurance to investors. "While tariff uncertainty persists, the markets are finding some solace in the latest developments," noted Ray Attrill, head of forex research and markets at National Australia Bank.
The decision was made shortly after Trump enacted executive orders that would impose 25 percent tariffs on steel and aluminum, set to take effect on March 12. Analysts noted a sentiment on trading floors suggesting that these measures might be employed as a negotiating strategy by the White House. Asian markets concluded the week on a generally positive note.
Hong Kong's market surged by over three percent as technology companies continued their upward trend, spurred by a Bloomberg report indicating that China had invited Alibaba co-founder Jack Ma and other leading entrepreneurs to meet with top officials in Beijing, raising expectations for renewed support for the private sector. Alibaba's stock increased by 6.3 percent, while JD.com and Tencent each saw gains exceeding seven percent. Other markets, including Shanghai, Sydney, Seoul, Wellington, and Jakarta, also experienced significant increases. In contrast, Tokyo's market declined, despite an 8.7 percent rise in Sony's shares following a strong earnings report, along with gains in Nissan and Honda after they announced the end of merger discussions. Markets in Singapore, Bangkok, Mumbai, and Taipei also experienced declines.
London and Paris opened with losses, while Frankfurt retreated from Thursday's record high. Wall Street provided a robust lead, driven by a rally in the technology sector. The S&P 500 finished just shy of a record high, and the Nasdaq gained more than two percent.
Traders in New York largely disregarded a rise in US wholesale prices that exceeded forecasts last month, which followed a report on the consumer price index released on Wednesday that also surpassed expectations, dampening hopes for another interest rate reduction.
