- Trump’s Tariffs, Curbs on China Hurt Asian Stocks: Markets Wrap
Asian stocks fell the most in three weeks as US President Donald Trump’s decision to go ahead with tariffs on
Canada and Mexico and order curbs on Chinese investment damped risk appetite. Shares fell across the
region with some of the biggest declines in Japan, Taiwan and Hong Kong. Treasury 10-year yields dropped
three basis points to 4.4% in Asia, after gold climbed to a record Monday on demand for havens. Bitcoin,
seen as a so-called “Trump trade,” slipped with other crypto currencies. Trump said tariffs scheduled to hit
Canada and Mexico next month were “on time” and “moving along very rapidly” following an initial delay.
Sentiment in the broader market also soured after the president told a government committee to curb
Chinese spending on tech, energy and other strategic American sectors. - S&P 500 closes lower Monday as market’s comeback attempt fizzles
The S&P 500 slid Monday as the market failed to bounce back from Friday’s steep sell-off. The broad market
index lost 0.5%, closing at 5,983.25. The Nasdaq Composite fell 1.21%, ending the session at 19,286.92. The
Dow Jones Industrial Average eked out a narrow gain of 33.19 points, or 0.08%, to close at 43,461.21. - Oil prices gain for a second day as U.S. sanctions on Iran raise supply concerns
Oil prices rose for a second day on Tuesday as the U.S. imposed fresh sanctions on Middle Eastern producer
Iran that increased concerns supply might tighten. Brent crude futures rose 38 cents, or 0.51%, to $75.16 a
barrel by 0217 GMT. U.S. West Texas Intermediate crude futures gained 43 cents, or 0.61%, to $71.13 a
barrel. Both contracts gained in Monday’s session after a $2 drop on Friday. WTI is looking for a base in the
support region between $65 and $70 a barrel, Tony Sycamore, market analyst with IG, said in a note.
“Provided it holds above here, a recovery back will follow.” The U.S. on Monday put new sanctions on more
than 30 brokers, tanker operators, and shipping companies for their role in transporting Iranian oil. President
Donald Trump has said he wants to bring Iran’s crude exports to zero. Iran is the third-largest producer in the
Organization of the Petroleum Exporting Countries, pumping 3.2 million barrels per day in January, according
to a Reuters survey of OPEC output. But gains were capped by the uncertain demand outlook.
U.S. President Donald Trump said on Monday that tariffs against Canadian and Mexican imports scheduled to
start on March 4 are “on time and on schedule” despite efforts by the two trading partners to address
Trump’s concerns about border security and fentanyl. Analysts say the tariffs would be bearish
for global oil demand growth. In Europe, Ukraine hosted European leaders to mark the three-year
anniversary of Moscow’s invasion, but U.S. officials stayed away in an illustration of President Trump’s move
closer to Russia. The market has viewed Trump’s warming relations with Moscow as a potential signal of an
easing in the sanctions on Russia, which would add to global oil supply. - Gold hovers near record high on Trump tariff worries
Gold held steady near a record high on Tuesday, underpinned by safe-haven demand on concerns that U.S.
President Donald Trump’s tariff plans could fuel inflation and trigger a major global trade war. Spot gold was
little changed at $2,950.39 an ounce, as of 0220 GMT, about $6 shy of the all-time high of $2,956.15 scaled
on Monday. U.S. gold futures gained 0.1% to $2,967.40. Market participants may be back to factor for tariff
risks, as the extended deadline for Mexico and Canada tariffs approaches next week, IG market strategist
Yeap Jun Rong said. Trump said on Monday tariffs on Canadian and Mexican imports were “on time and on
schedule” despite efforts by the countries to beef up border security and halt the flow of fentanyl into the
U.S. ahead of a March 4 deadline. Meanwhile, investors and economists expect the U.S. Federal Reserve to
respond “strongly and systematically” to changes in inflation and the labor market. “This week’s lineup of Fed
policymakers may deliver some hawkish rhetoric, but with market expectations already pricing in a prolonged
rate hold over the next two meetings, the impact on gold prices may be more contained,” Yeap said.
Gold is considered a safe investment during economic and political uncertainties, and thrives in a low interest
rate environment. Investors await the U.S. Personal Consumption Expenditures report, the Fed’s preferred
inflation gauge, for insights into the rate-cut path. The report is due on Friday. Elsewhere,
India’s gold imports are set to fall 85% in February from a year earlier to their lowest in two decades, with
demand sapped by record bullion prices. Spot silver climbed 0.3% to $32.45 an ounce. Platinum was flat at
$966, and palladium was down 0.4% at $936.25. - Trump says tariffs on Canada and Mexico ‘will go forward’
President Donald Trump said Monday that sweeping U.S. tariffs on imports from Canada and Mexico “will go
forward” when a monthlong delay on their implementation expires next week. “The tariffs are going forward
on time, on schedule,” Trump said when asked at a White House press conference if the postponed tariffs on
the two U.S. trading partners would soon go back into effect. The president claimed that the U.S. has “been
taken advantage of” by foreign nations on “just about everything,” and reiterated his plan to impose so
called reciprocal tariffs. “So the tariffs will go forward, yes, and we’re going to make up a lot of territory,”
Trump said. Trump signed executive orders on Feb. 1 imposing 25% tariffs on products from Mexico and
Canada, as well as 10% duties on Canadian energy. The president, who has praised the use of tariffs as both a
negotiating tool and a revenue source, based the orders on the alleged failures of Mexico and Canada to stop
crime and drug trafficking at their respective U.S. borders. But Trump paused the new tariffs two days later,
after Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau made separate
pledges to boost their border-policing efforts. Trump, announcing the new agreements on Truth Social on
Feb. 3, said the tariffs on Canadian goods would be paused for 30 days, while the duties on Mexican imports
would be postponed for one month. He said that during that interval, his administration would engage in
negotiations with Mexico and pursue a “final Economic deal with Canada.” Trump, in his norm-breaking first
month in office, also slapped 10% tariffs on Chinese imports and announced a plan to impose “reciprocal
tariffs” on American trading partners. China has already retaliated with its own targeted tariffs on U.S.
imports, stoking fears that a trade war between the two adversarial superpowers could rapidly escalate. A
similar fear has developed with regard to Mexico and Canada, who are among America’s closest allies and
top trading partners. Before Trump paused his tariffs on the two U.S. neighbours, both Trudeau and
Sheinbaum announced plans to install retaliatory tariffs on American imports. - Voters flock to political extremes in Germany as the centrist parties stumble
Chancellor Olaf Scholz’s SPD recorded its worst-ever federal election result, and despite winning the election,
the CDU-CSU alliance saw its second-worst result ever. Both the far-right Alternative fuer Deutschland and
the far-left Die Linke saw significant gains and were the most popular parties among young people. “This has
made the entire German political landscape more fragmented,” Carsten Brzeski, global head of macro at ING,
told CNBC in Berlin. - Bank of Korea slashes rates to lowest since August 2022 on economic worries, cuts growth forecast
The Bank of Korea cut rates to 2.75% from 3%, hitting its lowest since August 2022. This was the third rate cut
in four meetings, and in line with with expectations from economists polled by Reuters. BOK cut its 2025
growth outlook to 1.5% from 1.9% forecast in November, saying that domestic demand recovery and export
growth are likely to be lower than expected. - DeepSeek has stoked a rotation out of India stocks into Chinese equities — but experts advise caution
The MSCI China Index — up 26.5% so far from its January low — has gained nearly 18% this year, while the
MSCI India index has lost over 7% year to date. “Every time the China market goes up, the India market goes
down,” said Thio Siew Hua, managing director and head of equities at Lion Global Investors. Over 50% of
funds Nomura surveyed said they had cut their allocations to India by the end of January, while allocation to
China and Hong Kong stocks were increased. - Berkshire Hathaway shares rose 4.1% after the US conglomerate reported earnings. Analysts note that
results were boosted by a strong jump in insurance underwriting
Berkshire Hathaway’s operating earnings surged 71% in the fourth quarter, driven by higher interest rates
and a strong recovery in its insurance underwriting business. The company’s insurance investment income
jumped 48% to $4.1 billion, and its pretax underwriting earnings quadrupled to $3.4 billion, with GEICO being
the main contributor. Berkshire’s cash hoard grew to a record $334.2 billion, and Warren Buffett expects
pretax losses of approximately $1.3 billion from the recent wildfires in Los Angeles. TD Cowen analyst
Andrew Kligerman (hold): Berkshire reported better-than-expected 4Q earnings “on strong underwriting”.
Buffett reiterated that property and casualty insurance is Berkshire’s “core business”. Phillip Securities:
Berkshire’s operating profit was boosted “by a whopping 302% jump in insurance underwriting from the
year-earlier period”. - Alibaba shares fell 10.2% in US trading on Monday due to President Donald Trump’s latest executive
order, stirring fears about deepening trade tensions between the US and China
The Nasdaq Golden Dragon China Index fell 5.2% with Bilibili Inc. and Kingsoft Cloud Holdings also among
stocks that dropped 10% or more. The selloff marks a sharp reversal after a run up in Alibaba and other China
technology stocks in recent weeks amid optimism about artificial intelligence in the wake of DeepSeek.
Alibaba had gained about 70% this year through Friday’s close, while the Nasdaq Golden Dragon China Index
rose 18%. Over the weekend, Trump directed the committee on Foreign Investment in the US to limit Chinese
spending on technology and other strategic US sectors. - Nike shares rose 4.9% after Jefferies upgraded the stock to buy from hold, seeing the sportswear
company being positioned for a strong recovery over the next two years
Analyst Randal Konik says CEO Elliott Hill is prioritizing the restoration of wholesale partnerships and driving
innovations. Notes job listings for product positions have increased in FY25 YTD from FY24, and that Hill is
“intimately engaged” with both current and lapsed retail partners. “We think Hill has the right playbook; it
worked a decade ago, so it’s highly likely to work again”. The introduction of NikeSKIMS is “set to
revolutionize the activewear market,” with Konik noting the partnership with SKIMS is expected to drive
margin upside through higher IMUs. A survey conducted by Konik illustrates Nike’s brand remains “very
strong, proving that issues were self-inflicted and competitive threats less severe”. PT raised to $115 from
$75. - Shares in power and electrical equipment companies fell on Monday as TD Cowen notes that Microsoft
has begun canceling leases for a substantial amount of datacenter capacity in the US
Microsoft has voided leases in the US totaling “a couple of hundred megawatts” of capacity — the equivalent
of roughly two data centers — canceling agreements with at least a couple of private operators, TD Cowen
wrote Friday, citing “channel checks” or inquiries with supply chain providers. Power-related stocks fell,
including: Constellation Energy, Vistra Corp, Talen Energy. - Prosus NV agreed to buy Just Eat Takeaway.com NV for €4.1 billion, as the Dutch technology investor
with stakes in several food delivery companies seeks to become an industry giant
The all-cash deal at €20.30 a share is a 49% premium to the three-month volume-weighted average price.
The purchase marks an effort by Prosus Chief Executive Officer Fabricio Bloisi to find new sources of growth
after an early investment in Chinese video game company Tencent Holdings Ltd. ended up dominating the
company’s books and skewing its market value. Just Eat will add to Prosus’s food delivery portfolio, which
includes stakes in companies with operations in South America, India and Southeast Asia. After a growth
surge during the pandemic, food delivery apps have been hit by cutthroat price wars, which have driven
industry consolidation. Bloisi said his company has $18 billion in cash and could use as much as $11 billion on
acquisitions and investment in technology, although it plans for now to focus on growth and closing this deal.
“My plan after this transaction is to grow all our businesses faster — and we believe we can grow faster with
Just Eat Takeaway,” he said Monday. Just Eat shares rose 54%. Shares in Prosus fell 8.8%. - Palantir drops 10% for worst day since May as investors continue dumping onetime market favorite
Palantir shares tumbled on Monday, building on last week’s declines as the hot trade continued to show signs
of sputtering. The technology and defense stock dropped about 10.5% on Monday, marking its fourth straight
losing session and worst day since May. That comes after the stock fell 15% last week.
Last week’s declines came after the company disclosed a new stock sale plan from CEO Alex Karp. Comments
from Defense Secretary Pete Hegseth reported by The Washington Post on plans to slash defense budgets
also rattled investors of the company, which relies in part on government contracts.
These moves have heightened fears that Palantir, which has seen its popularity among retail
investors balloon over recent months, is now falling from grace. Indeed, the stock has plunged close to 24%
compared with where it sat a week ago. Monday’s declines pulled the stock more than 27% below the all
time closing high notched earlier this month. Still, the stock is up almost 20% so far in 2025, outpacing
the S&P 500′s gain of less than 2% during the same period. Palantir was the best performer in the S&P 500
last year with a surge of more than 340%. Palantir has gained a cult following of individual investors. Experts
and company analysts point to Karp’s eccentric persona and the stock’s big runup as two drivers of interest
from this group. On the other hand, the majority of analysts polled by LSEG have a hold rating. The typical
price target implies that shares can fall further.
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