Asia report: Markets mixed as Trump starts talking tariffs

(Sharecast News) - Markets in the Asia-Pacific region traded mixed on Tuesday, diverging from the record-setting highs seen on Wall Street overnight. US president-elect Donald Trump's suggestion that he would raise tariffs of 25% on products from Canada and Mexico, and of an additional 10% on imports from China, weighed on sentiment.

Patrick Munnelly at TickMill noted that the dollar saw a late-day bid in US trade after the tariff announcements from Trump.

"The nomination of fund manager Scott Bessent as Treasury Secretary, who is perceived as a representative of Wall Street in Washington, spurred a decline in stocks, thereby reversing some of the significant gains of the previous session.

"Bessent's appointment also resulted in a significant decrease in US yields, as investors purchased Treasury bonds, which caused the dollar to decline in the previous session.

"It seems that Trump is seeking to assert his authority following his nomination of Bessent as Treasury Secretary, a decision that markets anticipated would moderate Trump's policies."

Munnelly said given Trump's tariff talk throughout the election campaign, his remarks should not have been unexpected, although their timing was.

"The Hang Seng index in Hong Kong experienced a rise, reversing previous declines, as investors anticipate the possibility of additional stimulus to address tariffs.

"Trump has previously expressed his intention to terminate China's most-favoured-nation trading status and impose tariffs on Chinese imports that exceed 60%.

"This has undoubtedly caused an initial adverse reaction in Asian markets, exerting pressure on Chinese assets, particularly those in the export sector."

Markets mixed as Trump throws fresh tariff spanner in the works

In Japan, equities closed lower, with the Nikkei 225 falling 0.87% to 38,442.00 and the broader Topix down 0.96% at 2,689.55.

Heavy losses in industrial and tech stocks, including Fujikura, down 6.76%; Lasertec, off 5.49%; and Kawasaki Heavy Industries, which lost 5.39%, weighed on the indices.

Mainland Chinese markets also struggled, with the Shanghai Composite inching down 0.12% to 3,259.76 and the Shenzhen Component dropping 0.84% to 10,333.23.

Several stocks, including Beijing Dynamic Power and Jiangsu Etern, hit their daily limit-down levels of over 10%.

Hong Kong's Hang Seng Index bucked the trend, gaining 0.04% to 19,159.20.

Gains were led by tech and consumer discretionary stocks, with Baidu up 4.17%, Sands China rising 3.83%, and Alibaba Health climbing 2.27%.

South Korea's Kospi 100 declined 0.21% to 2,535.41, pressured by sharp declines in Hanwha Techwin, Netmarble Games and Hyundai Heavy Industries, which lost 11%, 6.18% and 5.58%, respectively.

Meanwhile, Australia's S&P/ASX 200 dropped 0.69% to 8,359.40, with losses in Spark New Zealand of 5.11%, and of 4.79% in Redox contributing to the downturn.

In New Zealand, the S&P/NZX 50 fell 0.62% to 13,113.76, with Pacific Edge and Serko shedding over 5%.

In currency markets, the dollar was last down 0.27% against the yen, trading at JPY 153.82, while it gained 0.23% on the Aussie to AUD 1.5410, but slipped 0.06% on the Kiwi, changing hands at NZD 1.7096.

Crude oil prices rose, with Brent crude futures last up 0.97% on ICE at $73.72 per barrel, while the NYMEX quote for West Texas Intermediate also advanced 0.97%, to $69.61.

Singapore manufacturing output growth falls short, Japan cost of services rises

In economic news, Singapore's manufacturing output grew 1.2% year-on-year in October, falling short of market expectations for a 2.2% increase, according to LSEG data.

The result marked a significant slowdown from September's robust 9.8% rise.

On a month-to-month basis, output edged up just 0.1%, again missing forecasts of 1.3% growth.

In Japan, the cost of services provided by businesses to other organisations edged higher, with the services producer price index rising to 2.9% in October from 2.8% in September.

The Bank of Japan attributed the increase to notable price gains in postal and hotel services.

The index is closely watched as a gauge of inflationary pressures within the corporate sector.

Meanwhile, trade tensions resurfaced as US president-elect Donald Trump announced plans to impose an additional 10% tariff on all Chinese imports.

The statement, made via Trump's Truth Social platform, followed a separate pledge to enact 25% tariffs on goods from Mexico and Canada as part of his first executive actions after taking office on 20 January.

Reporting by Josh White for Sharecast.com.