Global markets extend losses on US slowdown fears

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Shares dropped for a second day as investor concern mounted over the well being of the worldwide financial system amid President Donald Trump’s erratic tariff regime and fears of a US slowdown.

Chinese language, Japanese and Australian inventory markets all fell on Tuesday. Japan’s Topix and exporter-oriented Nikkei 225 index shed 1.5 and 1 per cent respectively. South Korea’s Kospi dropped 1.1 per cent and Australia’s S&P/ASX 200 declined 0.9 per cent.

On Monday, the US market noticed important falls, with the Nasdaq Composite down 4 per cent — its worst day in two and a half years — whereas the S&P 500 index tumbled 2.7 per cent over fears of the financial affect of Trump’s world commerce battle.

“The entire narrative of US exceptionalism has began to alter. Europe is up, the US is down. China is up”, mentioned Wei Li, head of multi-asset investments at BNP Paribas China, referring to indicators of an finish to US inventory market outperformance.

Chinese language and Hong Kong equities dropped sharply in early buying and selling however later pared again losses. The CSI 300 index was down 0.6 per cent, whereas Hong Kong’s Cling Seng index shed 1 per cent.

Expertise and industrial corporations led the falls in Asia, with Taiwan’s contract producers TSMC and Foxconn down 2.7 per cent and a pair of per cent. Korea’s Samsung Heavy Industries retreated 2.4 per cent whereas Japanese chipmaking tools producer Disco fell 0.3 per cent.

“It was a large de-risk [session] within the US,” mentioned Tommie Fang, head of China world markets at UBS. The affect on Chinese language markets can be lessened by native investor cash ready for alternatives to purchase the dip, he added.

“It is going to be a unstable market globally this yr, with Trump and [presidential adviser Elon Musk’s] every day information hitting headlines,” Fang added.

Futures markets pointed to a small restoration within the US and Europe, with contracts monitoring the S&P 500 up 0.2 per cent, whereas these for the Stoxx Europe 600 had been up 0.1 per cent and the Dax had been up 0.3 per cent.

Different analysts famous US tech shares had rallied exhausting over the previous yr, main some buyers to take revenue.

“The entire [US] tech sector has risen a lot since final April, even with the correction now, it has nonetheless rallied loads,” mentioned Wee Khoon Chong, a senior markets strategist at BNY.

“Individuals fear that is going to be a meltdown, however I don’t assume so,” he added.

The rising enchantment of Chinese language know-how corporations within the wake of startling synthetic intelligence advances by start-up DeepSeek has compelled buyers to reassess US tech corporations’ excessive valuations, he added.

“When you’ve a brand new, higher possibility, folks alter, valuations alter,” Chong mentioned.

Buyers piled into US Treasuries on Tuesday, with yields on two-year and 10-year bonds falling 0.04 proportion factors and 0.08 proportion factors, respectively.

The US greenback was flat towards a basket of six buying and selling companions and is down 4.6 per cent because the begin of the yr. The Japanese yen rallied earlier than paring beneficial properties to ¥147.3 a greenback and the Swiss franc was up 0.1 per cent to SFr0.88.

Oil was flat, with Brent futures, the worldwide benchmark, buying and selling at $69.35 per barrel. Costs fell 1.5 per cent on Monday in the course of the US session amid rising uncertainty over world demand.

Gold rose 0.2 per cent to $2895 per troy ounce.