Most Asian Stock Markets Advance, Led by China, Despite Threats of More Tariffs from US President-elect Donald Trump
Asian stock markets jumped on Monday, with Chinese markets leading gains following a string of positive business activity readings from the country. However, overall gains were held back by threats of more tariffs from US President-elect Donald Trump.
The Shanghai Composite index rose 0.5%, and the Shenzhen Composite index edged up 0.8%, while Hong Kong’s Hang Seng index climbed 0.2%. China’s factory activity expanded in November, with the Purchasing Managers’ Index (PMI) rising to 50.3 from 50.1 in October, driven by stronger output and new orders, reflecting the positive effects of recent government stimulus measures.
Gains in Asian markets were limited by Trump’s threat to impose 100% tariffs on goods from BRICS nations (Brazil, Russia, India, China, and South Africa) if they move to undermine the US dollar by creating or backing alternative currencies. Trump emphasized that countries attempting to replace the dollar in global trade would face severe economic consequences, effectively losing access to the US market.
The situation was also affected by Trump’s recent vow to impose higher import tariffs against China, Mexico, and Canada, which could spark a renewed trade war between the world’s biggest economies. South Korea’s KOSPI Composite index gained 0.2%, while the Philippines’ PSE Composite index climbed 0.8%. Malaysia’s FBM KLCI index rose 0.5%, and Indonesia’s Jakarta Composite index inched 0.2% higher, while India’s Sensex index dropped 0.2%.
In Japan, the Nikkei 225 index edged up 0.2%, while the Topix index gained 0.4%, despite data showing the country’s factory activity shrinking for the fifth consecutive month in November. Australia’s S&P/ASX 200 index inched up 0.1% after data showed the country’s unemployment rate climbed more than expected in October, driven by higher discretionary spending.
Markets will be focused on a slew of key economic cues this week, including the release of Australia’s third-quarter GDP figures, US Federal Reserve comments, and the Reserve Bank of India’s policy decision.