Asia-Pacific markets traded mixed Monday as investors assessed ongoing geopolitical concerns. On Sunday stateside, Canadian Prime Minister Mark Carney said that his country has no intention of pursuing a free trade agreement with China, after U.S. President Donald Trump threatened to impose 100% tariffs on Ottawa if it signed a trade deal with China. Japan’s Nikkei 225 slid 1.52%, while the Topix declined 1.76%. South Korea’s Kospi added 0.64% while the small-cap Kosdaq advanced 2.28%. The Japanese yen last strengthened 0.45% to trade about 155.01 against the dollar. Hong Kong Hang Seng index slid 0.26%, while mainland’s CSI 300 added 0.27%. Australia’s S&P/ASX 200 added 0.13%
U.S. equities were mixed on Friday, as the Nasdaq Composite extended its gains amid easing geopolitical fears and the Dow Jones Industrial Average underperformed. The tech-heavy Nasdaq advanced 0.28% and settled at 23,501.24, while the blue-chip Dow lost 285.30 points, or 0.58%, closing at 49,098.71. A nearly 4% slide in Goldman Sachs weighed on the 30-stock index. The broad market S&P 500 eked out a marginal gain of 0.03% to end at 6,915.61. The three major averages rallied for a second session on Thursday as investors were appeased by news of easing trade tensions and geopolitical risk. While the combined gains on Wednesday and Thursday had erased the Dow’s losses from earlier in the week, Friday’s move put it back in the red.
Gold prices rose more than 1% to above $5,070 an ounce on Monday, extending its record-breaking rally as safe-haven demand strengthened amid global uncertainties. Canadian Prime Minister Mark Carney said on Sunday that Ottawa has no plans to pursue a free trade deal with China, noting the recent agreement only reduces tariffs on select sectors. Carney's remarks came a day after President Trump threatened to slap 100% tariffs on Canadian imports if it solidifies a trade deal with Beijing. Frictions between the US and Europe over Greenland, as well as tensions in the Middle East, also kept investors on edge. Meanwhile, risks of a US government shutdown surfaced as Senate Democrats vowed to block a major funding bill following the Minneapolis shooting.
WTI crude oil futures traded around $61 per barrel on Monday, holding onto gains from the previous week amid heightened geopolitical risks. Developments in the Middle Middle East remained in focus after a US aircraft carrier strike group was deployed to the region as part of a significant military buildup amid tensions with Iran, fuelling fears of a potential escalation that could disrupt energy flows. Trade concerns also lingered after President Trump threatened to impose 100% tariffs on Canada if it finalizes a deal with China.
Canada has “no intention” of pursuing a free trade deal with China, Prime Minister Mark Carney said, after U.S. President Donald Trump threatened to slap punitive tariffs on Ottawa. Speaking to reporters on Sunday, Carney said that the country respects its obligations under the Canada-U.S.-Mexico trade agreement, known as CUSMA in Canada and the USMCA in the U.S., and will not pursue a free trade agreement without notifying the other two parties. Carney’s remarks come after Trump threatened to put a 100% tariff on Canadian exports if Ottawa “makes a deal” with Beijing. “If Governor Carney thinks he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken,” Trump posted on Truth Social Saturday.
Chances for a partial shutdown of the U.S. government by the end of this week grew on Sunday due to outrage over federal immigration agents fatally shooting Alex Pretti in Minnesota, the second such incident this month. A growing chorus of Democratic senators warned that they will not vote for a massive $1.2 trillion package to fund federal government operations if it includes appropriations for the Department of Homeland Security, which oversees immigration enforcement efforts. On Sunday, a person familiar with the thinking of the Senate’s Republican leadership told CNBC that they will not remove the DHS funding portion, despite that warning. “Government funding expires at the end of the week, and Republicans are determined to not have another government shutdown,” that person said. “We will move forward as planned and hope Democrats can find a path forward to join us,” they said.
India plans to slash tariffs on cars imported from the European Union to 40% from as high as 110%, sources said, in the biggest opening yet of the country’s vast market as the two sides close in on a free trade pact that could come as early as Tuesday. Prime Minister Narendra Modi’s government has agreed to immediately reduce the tax on a limited number of cars from the 27-nation bloc with an import price of more than 15,000 euros ($17,739), two sources briefed on the talks told Reuters. This will be further lowered to 10% over time, they added, easing access to the Indian market for European automakers such as Volkswagen, Mercedes-Benz and BMW. The sources declined to be identified as the talks are confidential and could be subject to last-minute changes. India’s commerce ministry and the European Commission declined to comment.
Japanese Prime Minister Sanae Takaichi said on Sunday her government will take necessary steps against speculative market moves, in the wake of a yen spike that heightened traders’ alert over the chance of currency intervention. Japanese government bonds and the yen have sold off in recent weeks on concern Takaichi’s expansionary fiscal policy and the slow pace of interest rate hikes by the Bank of Japan could lead to additional debt issuance and too-high inflation. After sliding near the psychologically important line of 160 to the dollar, the yen jumped suddenly on Friday after the New York Federal Reserve conducted rate checks, a move some traders saw as heightening the chance of joint U.S.-Japan intervention to halt the ailing currency’s slide.
A massive winter storm dumped sleet, freezing rain and snow across much of the U.S. on Sunday, bringing subzero temperatures and halting air and road traffic. Tree branches and power lines snapped under the weight of ice, and hundreds of thousands of homes and businesses in the Southeast were left without electricity. The ice and snowfall were expected to continue into Monday followed by very low temperatures which could cause “dangerous travel and infrastructure impacts” for days, the National Weather Service said. Heavy snow was falling from the Ohio Valley to the Northeast, while “catastrophic ice accumulation” threatened from the Lower Mississippi Valley to the Mid-Atlantic and Southeast.
The Trump administration is taking a 10% stake in USA Rare Earth as part of a $1.6 billion debt-and-equity investment package aimed at helping the company develop a domestic mine and magnet facility, two sources familiar with the deal told Reuters. The deal and a separate $1 billion private investment will be unveiled on Monday and Oklahoma-based USA Rare Earth will host a morning conference call with investors to discuss the terms, according to one of the sources who was briefed on the plans. The White House did not immediately respond to a Reuters request for comment. USA Rare Earth declined to comment. China is the largest global processor of rare earths, a group of 17 minerals used to make a range of electronics and military equipment.
The United States is in talks with Chevron, other crude producers, and major oilfield service providers about a plan to quickly raise Venezuela’s crude production, Bloomberg News reported on Saturday, citing senior administration officials. Officials have discussed deploying SLB, Halliburton and Baker Hughes to repair and replace outdated equipment, and refresh older drilling sites, the report said. Reuters could not immediately verify the report. The White House, Chevron, SLB, Baker Hughes and Halliburton did not immediately respond to Reuters’ requests for comment. With limited investment, Venezuela could boost production by several hundred thousand barrels over the short term, the report said, adding that modern U.S. equipment and techniques could revitalise existing wells and bring new production online within months.
India’s Adani group firms shed $12.5 billion in market cap on Friday, after a U.S. markets regulator asked a court for help in serving summonses upon founder Gautam Adani and group executive Sagar Adani over alleged fraud and a $265 million bribery scheme. Reuters reported the procedural request from the U.S. Securities and Exchange Commission, in the regulator’s civil case against the Adanis, on Thursday after the Indian markets closed. On Friday, the group’s flagship company, Adani Enterprises, was the top percentage loser on India’s benchmark Nifty 50. While the firm’s shares fell 10.65% to 1,864.2 rupees, the Nifty declined 0.95% at close. Group shares settled down between 3.4% and 14.54%. U.S. authorities in November 2024 accused Adani group executives of being part of a scheme to pay bribes to Indian officials for buying electricity produced by Adani Green Energy, a unit of the Adani group.
China’s yuan climbed to a new 32-month high against the dollar on Monday as the central bank continued its recent practice of carefully guiding the currency stronger by lifting the official midpoint guidance to manage the pace of appreciation. Despite the firm fixings, the central bank has been setting the midpoint weaker than market projections since November. And Monday’s fixing marked the largest weak-side deviation from market forecasts since such data first became available in 2022. Before the market opened, the People’s Bank of China set the midpoint at 6.9843 per dollar, the strongest since May 17, 2023, though it was 551 pips weaker than a Reuters estimate of 6.9292. In the spot market, the onshore yuan rose to a high of 6.9539 per dollar, the strongest level since May 16, 2023, before changing hands at 6.9558 at 0350 GMT. Its offshore counterpart last fetched 6.9522 per dollar at 0350 GMT.
Nvidia stock rose 1.5% Friday following a Bloomberg report that Chinese authorities have told major technology companies they can prepare orders for Nvidia’s H200 AI chips, suggesting Beijing may be close to formally approving imports of these critical AI components. According to the report, Chinese regulators have granted in-principal approval for tech giants including Alibaba Group, Tencent Holdings, and ByteDance to advance to the next stage of preparations for purchases. These companies can now reportedly discuss specific quantities they would require. The development contradicts recent reports suggesting Beijing was blocking H200 shipments to China. The H200 chips are essential components for running artificial intelligence systems and represent a significant part of Nvidia’s high-performance computing portfolio. Sources familiar with the matter indicated that Chinese officials would encourage companies to purchase a certain amount of domestic chips as a condition for approval, though no specific quota has been established yet.
Intel shares plunged 17% on Friday after the chipmaker issued lackluster guidance and warned of a supply shortage. The stock notched its worst day since August 2024. During a fourth-quarter earnings call with analysts Thursday, CEO Lip-Bu Tan said the company wouldn’t be able to meet full demand for its products. He said production efficiency, or yield, is also below his targets. “We are on a multiyear journey,” he said. “It will take time and resolve.” The chipmaker expects first-quarter revenue to range between $11.7 billion and $12.7 billion, and adjusted earnings per share to break even. That was below LSEG expectations for earnings of 5 cents per share and $12.51 billion in revenue. Over the last year, Intel shares have rallied more than double on hopes of a turnaround for the embattled American chipmaker, following investments from the U.S. government, SoftBank and Nvidia. The company’s foundry business has long underperformed competitors, which are profiting massively from the data center artificial intelligence boom.