China to US: ‘Market has spoken’ after tariffs spur selloff | Reuters
Markets across Asia took a cautious turn on Thursday, reacting to the latest updates in U.S.-China trade dynamics and broader economic signals from major global economies.
If you’ve been tracking the stock market lately, you’ll know it’s been anything but quiet—especially in the Asia-Pacific region. After a brief uptick thanks to some easing in the U.S.-China tariff standoff, markets across the region mostly slipped again on Thursday. So, what’s going on? Let’s break it down in simple terms.
📉 Asia-Pacific Stocks Mostly Slip After Brief Rebound
Here’s a quick look at how major indices performed:
- Japan’s Nikkei 225 dropped 0.90%, and the Topix shed 0.75%.
- South Korea’s Kospi was down 0.29%, while the smaller Kosdaq lost 0.37%.
- Hong Kong’s Hang Seng Index slid 0.42%, and China’s CSI 300 declined by 0.6%.
- India’s Nifty 50 was flat at the open.
- The exception? Australia’s S&P/ASX 200, which edged up 0.21%.
👉 Quick Take: Investors are still digesting recent policy moves and economic signals. The market mood is cautious, not yet confident.
💬 What’s Fueling This Uncertainty?
While the recent tariff truce between the U.S. and China gave investors a brief sigh of relief, analysts warn that we might not be out of the woods just yet.
Citi analysts put it this way:
“Markets have largely priced in peak tariff-related macro stress, but we remain wary of a second wave of volatility.”
This next wave, they say, could be sparked by two things:
- Uncertainty around fiscal policy (especially in the U.S.)
- Weakening economic data (what they call “hard data” like employment and consumer spending)
In short, the global economy is still tiptoeing through unpredictable terrain.
🇨🇳 China’s Moves: More Liquidity, But Stocks Stay Choppy
On Thursday, China’s central bank reduced its reserve requirement ratio (RRR)—essentially freeing up $138 billion (1 trillion yuan) in market liquidity. That’s a big move, aimed at supporting growth amid ongoing trade tensions.
But here’s the catch:
Chinese equities still stayed volatile. The CSI 300 was down 0.6% in choppy trading.
According to portfolio manager Vivian Thurston:
“Even with the tariff reprieve, Chinese equities are unlikely to see a sustained rerating just yet.”
🇦🇺 Australia Surprises with Strong Jobs Data
In some good news, Australia’s April employment report crushed expectations. The country added 89,000 jobs—well above the 20,000 forecast by Reuters. And the unemployment rate? It held steady at 4.1%.
That’s a pretty strong signal that the Australian economy is holding its own—for now.
🛢️ Oil Prices May Drop Again – Thanks to Diplomacy?
Oil’s been on a bit of a rollercoaster lately. Prices rose recently as trade tensions cooled, with Brent crude pushing past $66 per barrel. But now, Citi analysts say prices could fall again if a U.S.-Iran nuclear deal comes through.
They’re predicting oil will average around $62–$63 per barrel over the next two quarters.
One key thing to watch? U.S. President Donald Trump’s visits to the Middle East, including Saudi Arabia, Qatar, and the UAE—which could play a big role in any upcoming diplomatic developments.
🌏 So, What Should Investors Watch Next?
Here are the three things to keep an eye on:
- Any new moves in U.S.-China trade relations. Are we looking at long-term peace, or is this just a short truce?
- China’s domestic policies. Will liquidity boosts be enough to stabilize markets?
- Oil prices and geopolitical negotiations. A U.S.-Iran deal could shake things up.
📌 Final Thoughts
Markets across Asia-Pacific are in a wait-and-watch mode. There’s a mix of optimism and caution, with investors reacting to every new piece of the puzzle. Whether it’s trade talks, job data, or oil prices, one thing’s for sure—volatility isn’t going away just yet.
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