Asian and European markets saw slight gains on Tuesday, recovering some of their recent significant losses. However, the cautious sentiment and rising uncertainty led gold to set another record high as President Donald Trump readies his tariffs announcement.
Investors are positioning themselves for Trump’s so-called “Liberation Day” on Wednesday, when he plans to impose tariffs on “all countries” in response to claims of years of unfair trade practices. Although Trump indicated he would be “very kind” in unveiling the tariffs, the lack of details regarding their targets has created confusion on trading floors, driving equity markets down and fueling recession fears.
Last week, Trump’s suggestion of 25% tariffs on car imports worsened market sentiment. With governments potentially reacting by either complying with or retaliating against the measures, market volatility is expected to persist.
On Tuesday, Vietnam announced it would reduce duties on various goods, including cars and liquefied gas, in response to the looming tariffs.
“Some Wall Street analysts suggest that April 2 may not be as severe as anticipated, which could spark a rally in risk assets,” said Jose Torres, senior economist at Interactive Brokers. “However, others are concerned that the economy may not withstand such pressure, particularly with households struggling to maintain spending amid growing challenges.”
Despite a tough market outlook, equities showed a slight recovery on Tuesday. Markets in Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Taipei, Bangkok, Singapore, and Wellington posted small gains. However, Mumbai saw a decline. European markets, including London, Paris, and Frankfurt, opened higher.
Gold, traditionally viewed as a safe haven, surged to a new high, reaching $3,149.00 as investor fear increased, pushing the VIX “fear index” higher for the fourth consecutive day.
Michael Wan from MUFG noted, “We believe markets are underestimating the full impact of these tariffs, with Trump potentially being more aggressive than expected in reshaping the post-WWII global order.”
Market Highlights:
- Tokyo – Nikkei 225: Flat at 35,624.48 (close)
- Hong Kong – Hang Seng Index: +0.6% at 23,266.32
- Shanghai – Composite: +0.4% at 3,348.44 (close)
- London – FTSE 100: +0.9% at 8,661.53
- Euro/Dollar: Down at $1.0810 from $1.0817 on Monday
- Pound/Dollar: Up at $1.2928 from $1.2916
- Dollar/Yen: Up at 149.99 yen from 149.94 yen
- West Texas Intermediate: +0.3% at $71.72 per barrel
- Brent Crude: +0.3% at $75.00 per barrel
- New York – Dow: +1.0% at 42,001.76 (close)
Source: AFP
