BANGKOK, March 5: Asian shares and US futures were mostly higher on Wednesday following a rocky session on Wall Street after Canada, Mexico and China were hit by steep US tariffs that took effect on Tuesday.
Comments by US President Donald Trump in a speech to Congress and the nation appeared to have scant impact on world markets. The future for the S and P 500 was up 0.5 per cent, while that for the Dow Jones Industrial Average gained 0.4 per cent.
China announced it intends to keep its economy growing at around a 5 per cent annual pace in 2025, in line with last year’s target, as it opened the annual session of its largely ceremonial legislature. Premier Li Qiang also promised more government spending and other measures to support growth.
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Hong Kong’s Hang Seng index jumped 2.6 per cent to 23,548.86, while the Shanghai Composite index climbed 0.6 per cent to 3,342.36.
Tokyo’s Nikkei 225 index edged 0.2 per cent higher to 37,418.24. In South Korea, the Kospi gained 1.2 per cent to 2,558.13, while Australia’s S and P/ASX 200 shed 1.2 per cent to 8,141.10.
On Tuesday, US stocks racked up more losses on Wall Street as the trade war between the US and its key trading partners escalated.
The Trump administration imposed 25 per cent tariffs on imports from Canada and Mexico starting Tuesday and doubled tariffs against imports from China by 20 per cent.
All three countries announced retaliatory actions, sparking worries about a slowdown in the global economy.
The S and P 500 fell 1.2 per cent to 5,778.15, with more than 80 per cent of the stocks in the benchmark index closing lower. The Dow slid 1.6 per cent to 42,520.99.
The Nasdaq composite slipped 0.4 per cent to 18,285.16. The tech-heavy index briefly reached a 10 per cent decline from its most recent closing high, which is what the market considers a correction, but gains for Nvidia, Microsoft and other tech heavyweights helped pare those losses.
Financial stocks were among the heaviest weights on the S and P 500 index. JPMorgan Chase fell 4 per cent and Bank of America lost 6.3 per cent.
The market could soon face more twists in the tariff drama. After Tuesday’s closing bell, Commerce Secretary Howard Lutnick told Fox Business News that the US would likely meet Canada and Mexico “in the middle” on tariffs, with an announcement coming as soon as Wednesday.
The market rally after Trump’s election in November had been built largely on hopes for policies that would strengthen the US economy and businesses. Worries about tariffs raising consumer prices and reigniting inflation have been weighing on both the economy and Wall Street.
The tariffs are prompting warnings from retailers, including Target and Best Buy, as they report their latest financial results. Target fell 3 per cent despite beating Wall Street’s earnings forecasts, saying there will be “meaningful pressure” on its profits to start the year because of tariffs and other costs.
Best Buy plunged 13.3 per cent for the biggest drop among S and P 500 stocks after giving investors a weaker-than-expected earnings forecast and warning about tariff impacts.
Concerns about profits follow a series of economic reports with worrisome signals that include US households becoming more pessimistic about inflation and pulling back on spending. Consumer spending has essentially driven US economic growth in the face of high interest rates.
Retaliations against the higher tariffs were swift.
China responded to new US tariffs by announcing it will impose additional tariffs of up to 15 per cent on imports of key US farm products, including chicken, pork, soy and beef, and expanded controls on doing business with key US companies.
Canada plans on slapping tariffs on more than USD 100 billion of American goods over the course of 21 days. Mexico also plans tariffs on goods imported from the US.
In other dealings early Wednesday, US benchmark crude oil lost 52 cents to USD 67.74 per barrel, while Brent crude, the international standard, fell 18 cents to USD 70.86 per barrel.
The US dollar fell to 149.78 Japanese yen from 149.82 yen. The euro slipped to USD 1.0607 from USD 1.0626.
Bitcoin was trading at about USD 87,700 according to CoinDesk. (AP)
