Asian Stocks Jittery as Tariff Concerns Mount: Markets Wrap

(Bloomberg) -- Asian stocks stumbled on Friday, in the wake of ominous signals from US corporate earnings and a series of central bank meetings that raised more questions than answers for the global economy.

Hong Kong shares faced heavy selling pressure, with a gauge of technology stocks in the city sliding around 3% after a recent rally. A broader index of Chinese stocks listed in the financial hub headed for its steepest two-day drop since November. Shares in Indonesia and Taiwan also fell, although those in Japan edged higher. US futures were largely steady.

Equity investors in Asia are confronting an increasingly cloudy outlook for the global economy, as tariff fears and corporate earnings weigh on sentiment. US President Donald Trump said both broad reciprocal tariffs and certain additional sector-specific tariffs would come into force on April 2, a major risk for the global economy.

“You’ve seen President Trump’s policies inject the market with a wave of uncertainty that we’ve not seen for many years,” said Todd Jablonski, global head of multi-asset and quantitative investments at Principal Asset Management, on Bloomberg Television. The firm has dialed back risk in multi-asset portfolios, he said. 

Shares of FedEx Corp. — considered an economic barometer — sank after the firm cut its profit outlook given higher costs and signs of weakening demand. Nike Inc. also cited the tariffs and geopolitics tensions as factors that will impact its earnings.

Investors are now turning their attention to a raft of upcoming earnings from Chinese companies, with bellwethers Xiaomi Corp., Tencent Holdings Ltd. and e-commerce giant Meituan among those set to report. US-listed shares of PDD Holdings Inc. rose after its earnings beat expectations, but the company acknowledged challenges from growing global uncertainty.

Central Bank Signals

In theory, investors should have been able to get a clear sense of direction this week, with policy meetings by the Federal Reserve, the Bank of Japan and the Bank of England all providing signals. But these central banks pointed to the tariffs as obscuring the outlook, exacerbating a sense among investors that the world is flying blind into April 2.

The European Union this week delayed a proposed tariff on American whiskey. The trading bloc is ready to talk to Trump before making further decisions on retaliatory tariffs, Ireland’s deputy prime minister said.

Treasuries were largely unchanged Friday, while an index of the dollar was slightly higher. The yen weakened after consumer inflation slowed. The pound lost more ground after the Bank of England voted to stand pat on rates.

Weakness on Wall Street also comes ahead of a big test later Friday when $4.5 trillion of options contracts expire in an event known as triple witching that often stokes volatility.

“We will go up and down as policy uncertainty continues,” Michael Rosen, chief investment officer at Angeles Investments, said in an interview at Bloomberg headquarters in New York. “Investor sentiment is going to be very volatile, and that will be reflected in the market.”

Indonesia’s benchmark stock index fell as much as 2.6% before paring its losses. Rising questions about the policies of President Prabowo Subianto have frayed nerves in the country, fueling a precipitous crash earlier this week.

Oil climbed after the US sanctioned a Chinese refinery, a marked step-up of measures to curb supply from Iran. Gold fell slightly after nearing a record high.

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 2 p.m. Tokyo time
• Japan’s Topix rose 0.5%
• Australia’s S&P/ASX 200 rose 0.1%
• Hong Kong’s Hang Seng fell 2.1%
• The Shanghai Composite fell 1%
• Euro Stoxx 50 futures fell 0.2%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%
• The euro fell 0.2% to $1.0829
• The Japanese yen fell 0.5% to 149.46 per dollar
• The offshore yuan was little changed at 7.2572 per dollar

Cryptocurrencies

• Bitcoin rose 0.1% to $84,625.17
• Ether rose 0.2% to $1,982.32

Bonds

• The yield on 10-year Treasuries advanced one basis point to 4.25%
• Japan’s 10-year yield advanced one basis point to 1.525%
• Australia’s 10-year yield advanced two basis points to 4.40%

Commodities

• West Texas Intermediate crude rose 0.3% to $68.29 a barrel
• Spot gold fell 0.5% to $3,029.85 an ounce

This story was produced with the assistance of Bloomberg Automation.

(Updates throughout. An earlier version corrected the volume of expiring options in paragraph 12)

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