Most Asian markets advanced on Tuesday, buoyed by optimism that President Donald Trump may extend or expand exemptions on his controversial trade tariffs. However, gains remained capped by caution over ongoing trade tensions and the potential for renewed levies targeting Chinese goods.
Market Overview
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Positive Sentiment:
Asian markets took their cue from Wall Street’s back-to-back gains, driven by optimism surrounding potential tariff carveouts and upbeat U.S. bank earnings. -
U.S. Futures Signal Hesitation:
In early Asia trade, S&P 500 Futures dipped 0.1%, indicating investor caution amid thin trading volumes ahead of the Good Friday holiday.
Regional Market Performance
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Winners:
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Japan’s Nikkei 225: +1.3%
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South Korea’s KOSPI: +1.1%
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Singapore’s Straits Times Index: +0.9%
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Taiwan Weighted Index: +1.0%
Gains in these markets were underpinned by strength in technology and automobile stocks, sectors seen as benefiting from the partial tariff exemptions.
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Laggard:
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China: Mainland Chinese stocks swung between gains and losses as Beijing remained locked in a tense standoff with Washington. While some relief came from temporary U.S. tariff exemptions, sentiment was subdued by Trump’s comments suggesting these waivers may not last.
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Sector Highlights
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Technology Sector:
Tech stocks continued to outperform, thanks to the White House’s confirmation that its 145% reciprocal tariffs on Chinese goods would exclude electronics, reducing the threat of near-term disruption to the global semiconductor and electronics supply chain. -
Automobiles:
Japanese and South Korean auto giants rallied on hopes that further exemptions might include vehicle exports, particularly amid speculation that bilateral negotiations are ongoing behind the scenes.
Caution Still Lingers
Despite the gains, investors remain wary:
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Temporary Nature of Exemptions: Trump’s latest remarks hinted that all exemptions could be reviewed or revoked depending on Beijing’s response—creating an overhang of policy uncertainty.
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Low Volumes, High Volatility: Trading activity is expected to be subdued through the week, increasing the likelihood of exaggerated price swings.
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China’s Trade Position: Ongoing U.S.-China tensions and a potential escalation in retaliatory measures continue to weigh on sentiment in Shanghai and Shenzhen.
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Conclusion
Asian markets are cautiously climbing on tariff optimism, but persistent U.S.-China trade risks mean the rally remains fragile. With volatility looming and temporary exemptions still in the spotlight, investors will need to stay nimble and data-driven in the days ahead.
