Asian stocks returned to a calm measure on Tuesday after three days of global market turmoil since the pandemic on the 19th, i.e.
Before the Chinese market opened, the government released a series of measures to stabilize stocks. In turn, Hong Kong's share price rose 1.5% the day after it fell 13.2%. Mainland China's benchmark rose by 1%, recovering from a sharp drop the day before.
In Japan, Japan's main benchmark Nick 225 rose 5%, making up for a portion of the losses in the previous few days. After the rise in sentiment, Finance Minister Scott Bessent made a comment on Monday, who said he would soon start discussing tariffs with the Japanese government.
South Korea's KOSPI index rose by about 1.5%.
Last week, Trump announced broad new tariffs, with no feudalism in the world, which has a basic tax on U.S. import tax of 10%, plus dozens of tax rates in dozens of countries. Countries respond to their own tariffs or retaliation threats on U.S. goods. China retaliated strongly on Friday, matching the new 34% tariff with tariffs from many U.S. imports.
In the U.S. on Monday, the 500 index fell 0.2%, which at some point put the benchmark in bear markets or lowered 20% or more from its recent high. S&P Futures (S&P) futures show that the market may perform 1.5% higher when trading in New York on Wednesday.
Wall Street executives and analysts are increasingly concerned that trade tensions will cause lasting damage to the global economy.
“The quicker this problem is solved, the faster it will be solved, because some negative effects will increase cumulatively and it will be difficult to reverse,” Jamie Dimon, CEO of JPMorgan Chase, wrote in an annual letter to shareholders on Monday. Some banking economists have predicted that the economy will fall into recession later this year.
The 10.5% decline in the S&P 500 on Thursday and Friday was the worst two-day decline in the index’s decline since the 2020 coronavirus pandemic.
Mr. Trump's trade stance on him remains relentless as new high-interest tariffs take effect on Wednesday. He released a new final atum to China on Monday to remove its retaliatory tariffs on the United States or to face additional 50% tariffs starting Wednesday.
But China said on Tuesday that it did not surrender.
Several government departments and government-owned enterprises issued statements and promised to “maintain smooth operation of the capital market.” The country's central bank, the People's Bank of China, vowed to support the central investment of China's sovereign wealth fund, which said it is increasing its holdings in its stock funds.
Additionally, with a large central government-owned company, China Merchant Group, which trades in Hong Kong, they will accelerate a plan to buy back some of its shares, a move that will usually raise the share price.
The so-called Chinese “national team” move is reminiscent of the efforts made by Beijing during the 2015 market crisis.
At that time, the Chinese government's efforts to increase stock prices were carried out after its own wrong measures raised and lowered prices. This time, Beijing’s intervention appears to be proposed by the strategy of Chinese leader Xi Jinping, who uses his administration as a pillar of stability and calm, opposing the global economic turmoil released by Mr. Trump’s tariffs.
It remains to be seen how effective Beijing's actions will be. Cheng Chen, a finance professor at the University of Finance at the University of Hong Kong, said the collapse of the Chinese market ten years ago was driven by the sudden loss of confidence among investors, so supporting stocks helped calm the nerves.
But Mr. Trump's tariffs could cause damage to China's economy. “This time, it's much deeper than just market psychology,” Mr. Chen said.
Christopher Buckley,,,,, Amy Chang Chien and Akira Davis Rs Contribution report.
