Mixed Asian Stocks Amid Tariff Worries and Inflation Fears

Mixed markets characterized Friday's trading as tariff worries weighed on investor sentiment. With geopolitical tensions rising, traders cautiously adjusted their positions, leading to fluctuations in stock prices across Asia.

Date: 21-03-2025

AI Rating: 5

Market Reaction to Geopolitical Tensions
Asian stocks concluded mixing, influenced by concerns over tariffs and increasing geopolitical tensions. Notably, Israeli airstrikes on Gaza have reignited inflation worries, leading traders to book profits after recent gains. In addition, the rising crude oil prices due to escalated tensions, coupled with fresh U.S. sanctions on Iran, add pressure.

Impact on Specific Markets
China's Shanghai Composite index saw a decline of 1.29%, driven by a lack of catalysts ahead of upcoming bank earnings. Hong Kong's Hang Seng index also experienced a 2.19% drop, reflecting evaporating stimulus hopes, particularly affecting tech giants Alibaba and Baidu, which fell by 3.5% and 2.5%, respectively.

In Japan, the Nikkei average fell slightly by 0.20% while the broader Topix index managed a small gain. The contrasting movements can be attributed to a weaker yen and softer inflation data reinforcing expectations for continued policy normalization by the Bank of Japan.

Positive Developments
Amidst the negativity, some markets saw gains. The Kospi in Seoul rose 0.23% led by chip-related stocks, benefiting from Micron Technology's better-than-expected earnings report indicating strong demand in the AI sector. Australian markets edged up, with slight gains primarily driven by miners and consumer staples. Meanwhile, Woolworths surged 6.3% and Coles Group climbed 4.9%, due to favorable conditions from the competition watchdog.

U.S. Market Snapshot
The U.S. markets closed modestly lower due to fears surrounding President Trump's tariffs and rising geopolitical tensions, manifesting a cautious approach among investors. Jobless claims remained steady and there was an unexpected uptick in existing home sales, aiding in mitigating worries about an economic slowdown. The fluctuations in major indices reflect heightened uncertainty among investors.

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