Asian stocks declined Thursday as concerns over high U.S. interest rates and fresh trade tariffs dampened investor sentiment. Hong Kong’s Hang Seng led the losses, falling 2.2%, as enthusiasm for AI stocks waned.
Wall Street provided a mixed lead, with the S&P 500 hitting a record high but showing limited gains due to weaker risk appetite. U.S. stock futures slipped after President Donald Trump announced plans to impose 25% tariffs on automobiles, pharmaceuticals, and semiconductors within a month, along with new duties on lumber.
Trade-sensitive markets reacted sharply. Japan’s Nikkei 225 dropped 1.7%, while the TOPIX lost 1.5%. Major automakers Toyota and Honda both fell over 2% as concerns grew over their reliance on U.S. sales. South Korea’s KOSPI declined 0.6%, and Singapore’s Straits Times Index edged down 0.1%. Australia’s ASX 200 slid 1.3%, hit by both tariff concerns and stronger-than-expected job data, which reinforced expectations of a hawkish Reserve Bank of Australia.
Hong Kong’s tech sector took a hit, with Baidu dropping over 2% after weak earnings, dragging Alibaba down 2.5%. While optimism over AI had driven Chinese tech stocks higher in recent weeks, market momentum faded.
Mainland Chinese markets also weakened, but losses were limited amid expectations of further stimulus from Beijing. The People’s Bank of China kept its loan prime rate at record lows. The Shanghai Shenzhen CSI 300 fell 0.4%, and the Shanghai Composite lost 0.2%.
Despite the market downturn, hopes for a potential U.S.-China trade deal provided some support. However, Trump’s earlier 10% tariffs on Chinese goods in February remain a headwind for the region’s economic outlook.


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