Asian Markets Seek Direction Amid Uncertainty, Tencent Boosted by AI Tie-Up
Overview
Asian stock markets opened mixed on Monday, as investors grappled with the uncertain implementation of President Donald Trump’s threatened tariffs. In Hong Kong, shares of Tencent surged following its partnership with AI startup DeepSeek.
Regional Performance
- Tokyo’s Nikkei 225 index gained 0.07% to 39,178.87 points.
- Sydney’s S&P/ASX 200 index declined 0.79%.
- Seoul’s Kospi index rose 0.71%.
Tariff Concerns and Market Sentiment
Investors are digesting Trump’s threats to impose "reciprocal" tariffs across the board, which could destabilize global trade. According to MUFG Bank, countries like India, Indonesia, Thailand, and Vietnam could face significant increases in U.S. import duties.
Analysts note some market skepticism regarding Trump’s tariff plans, with the focus shifting to the delayed April implementation and potential room for negotiations. However, the situation remains uncertain, and investors are cautious.
Geopolitical Developments and Market Impact
Markets are also monitoring developments related to the Russia-Ukraine conflict and the prospect of a U.S.-brokered ceasefire. This could provide some positive sentiment, but it is being balanced by concerns raised by Vice President J.D. Vance’s recent speech on U.S.-EU relations.
Stephen Innes of SPI Asset Management suggests that any genuine progress towards de-escalation in Eastern Europe could stimulate global risk appetite, benefiting stock markets. However, he warns that tariffs remain a major risk factor, with their potential impact on inflation and interest rates.
Currency and Sector Movements
The initial strengthening of the U.S. dollar due to tariff expectations has eased amid the uncertainty surrounding Trump’s plans. The dollar fell 0.33% against the Japanese yen to 151.79 yen per dollar. This decline negatively impacted export-oriented stocks in Tokyo.
Nissan shares dropped 2.02%, Toyota plunged 2.03%, and Honda lost 2.92%. In Seoul, Hyundai slid 2.42%.
Tencent Surges on AI Partnership
In Hong Kong, the Hang Seng index edged down 0.15% to 22,587.39 points. Tencent shares surged 5.8% after it announced the integration of DeepSeek’s chatbot into its popular WeChat messaging platform, signaling increased adoption of artificial intelligence.
China’s Market Performance
In mainland China, the Shanghai Composite index lost 0.15%, while the Shenzhen Composite index gained 0.38%, supported by tech stocks. The tech sector remains buoyed by the upcoming meeting between President Xi Jinping and executives from major tech firms, including Tencent and Alibaba’s co-founder Jack Ma.
Oil Prices Continue to Fall
Oil prices continued their decline, pressured by the prospect of a full return of Russian oil to global markets in the event of a ceasefire in Ukraine. Brent crude fell 0.17% to $74.61 per barrel, while U.S. West Texas Intermediate (WTI) crude lost 0.27% to $70.54 per barrel.
