Struggles Persist for Hong Kong Stock Exchange
In a surprising turn of events, Asian markets are expected to open negatively on Monday, primarily due to the impact of newly imposed sweeping U.S. tariffs on over 60 nations starting August 7, 2025, and a weak American jobs report indicating economic slowdown.
The U.S tariffs, some as high as 50% on certain countries and products, have raised costs, disrupted trade relations, and created uncertainty among major Asian economies like China, India, South Korea, and others directly affected by these tariff hikes.
The new tariffs have led to an increase in the overall effective tariff rate to the highest levels since the 1930s, resulting in higher consumer prices and income losses, particularly for countries that export heavily to the U.S. This escalates trade tensions and reduces confidence in export-driven Asian markets.
The weak U.S. jobs data suggests slower American economic growth, which diminishes demand for imports from Asia and dampens market sentiment globally. As a result, the global forecast for Asian markets is broadly negative.
Last week, the Hang Seng finished lower, with losses from financial shares, property stocks, and technology companies. The index is expected to open in the red on Monday. Notable declines were seen in companies like China Mengniu Dairy, China Resources Land, CITIC, China Life Insurance, and WuXi Biologics, all of which experienced significant losses.
The sell-off on Wall Street came amid concerns about the economic impact of President Donald Trump's tariffs. The Dow Jones Industrial Average tumbled 542.42 points or 1.23 percent to finish at 43,588.58. European and U.S. markets were sharply lower, and Asian bourses are expected to follow suit.
The new tariffs are intended to address concerns about transshipping goods to evade applicable duties, with a 40 percent levy to be imposed on such goods. However, the fear of increased costs and disrupted trade relations has led to negative sentiment in the markets.
Crude oil prices also experienced a fall on Friday due to demand concerns for potentially reduced consumption amid new tariffs. West Texas Intermediate crude for September delivery was down $1.92 or 2.77 percent at $67.34 per barrel.
Despite the Alibaba Group climbing 1.04 percent, the overall negative sentiment generated in reaction to the weak American jobs report and new tariffs has cast a shadow over the Asian markets. The Hang Seng Index currently rests above the 24,500-point plateau, but the anticipation of continued economic pressure and weaker consumption has investors bracing for a challenging week ahead.
- The new U.S tariffs, affecting numerous Asian countries and a wide range of products, are causing uncertainty in technology companies, as increased costs and disrupted trade relations have led to negative sentiment in the markets.
- The impacts of the U.S tariffs, including higher consumer prices, income losses, and loss of market confidence, are not limited to traditional export-driven sectors; they also extend to technology companies, potentially resulting in stalled growth and reduced investor confidence.
