AP – Asian shares wavered despite upbeat Chinese factory data, after beginning the day with solid gains, as sharply higher tariffs on United States (US) imports of Chinese goods looked set to take effect today.
In Hong Kong, Chinese bubble tea chain Mixue Bingcheng’s shares soared 43 per cent yesterday after its USD444 million IPO. Local reports said it set a local record for subscriptions, which exceeded HKD1 trillion (USD128 billion). The company claims to be the world’s largest food retail chain, with more than 45,000 outlets.
But after a strong start, Hong Kong’s Hang Seng shed 0.2 per cent to 22,898.55, while the Shanghai Composite index slipped 0.3 per cent to 3,310.52.
In Tokyo, the Nikkei 225 advanced 1.7 per cent to 37,785.47.
South Korean markets were closed for a holiday, while the S&P/ASX 200 in Australia gained 0.9 per cent to 8,245.70.
Bangkok, the SET fell 0.8 per cent. Surveys of Chinese factory managers showed signs of improvement in February as new orders rose, likely driven by companies moving quickly to beat rising tariffs on exports to the US, where the administration of US President Donald Trump has boosted import duties on Chinese goods to 20 per cent, effective today.
A report by Global Times said China was considering retaliatory moves, including higher tariffs on US exports of food and other agricultural goods.
On Friday, the S&P 500 jumped 1.6 and the Dow Jones Industrial Average gained 1.4 per cent. The Nasdaq composite jumped 1.6 per cent to 18,847.28.
The S&P 500 had dropped in five of the prior six days after weaker-than-expected reports on the economy and worries about US President Donald Trump’s tariffs knocked the index off its all-time high set last week.
Stocks that flew in the frenzy around artificial intelligence technology have slumped sharply and Bitcoin dropped more than 20 per cent from its record.
On Friday, Nvidia rose four per cent following its 8.5 per cent tumble last Thursday and was the strongest force lifting the S&P 500.
Stocks rose following an economic report that included both positives and negatives.
Inflation across the country cooled a bit as economists had expected, according to the measure that the Federal Reserve (Fed) prefers to use.
That’s good news for the entire market because it could give the central bank leeway to continue cutting its main interest rate at some point later this year.
The Fed has been keeping rates on hold so far this year after cutting them sharply late last year, in large part because of concerns about inflation, which is still high, even if it’s not as bad as its peak in 2022. A widespread worry is that increased tariffs and other policies announced by Trump could push prices for the cost of living even higher.
Friday’s report also said US households pulled back on their spending during January, likely undermining a major engine that has been staving off a recession despite high interest rates.
Wall Street hopes that Trump is just using the tariffs as a bargaining chip in negotiating with other countries and that he’ll tamp them down. That would mean less pain for the global economy than initially feared.
But recent reports have nevertheless shown all the talk of tariffs has US consumers bracing for much higher inflation, which could drag on the economy.
Uncertainty around tariffs, deregulation and other potential moves could mean “if the market doesn’t see Trump moving towards more market-friendly policies, the level of trust could continue eroding,” Bank of America economists wrote in a BofA Global Research report.
Of course, much of January’s drop in spending by US households could have been the simple result of painfully cold weather around the country and other anomalies. But it also followed several signals of slowing growth for the US economy, which closed 2024 running at a solid pace.
In other dealings yesterday, US benchmark crude oil picked up 42 cents to USD70.18 per barrel, while Brent crude, the international standard, was up 43 cents at USD73.24 per barrel.
The US dollar fell to JPY150.46 from JPY150.72. The euro rose to USD1.0412 from USD1.0402.
Bitcoin was trading at USD92,500 after trading around USD84,000 on Friday.
