PETER’S BUSINESS & FINANCE BRIEFING – Tuesday 29 April 2025, 06:00 Hong Kong
● China rolls out employment support measures ● Bessent says trade talks with Asian countries ‘moving along very well’ ● Toyota spurs hope for a wider corporate shake-up in Japan
Tuesday’s Opening Call
Hang Seng (Hong Kong) Projected Open: 22,077 +105 points +0.5%
Nikkei 225 (Japan) Markets closed for public holiday
Quick Summary - 4 Things To Know Before Asian Markets Open
The status of trade negotiations with China remains unclear. On Friday, Donald Trump insisted that President Xi had called him, adding, “I don't think that's a sign of weakness on his behalf.” However, Beijing denied that talks to ease trade tensions between the world’s two largest economies had started. Foreign Ministry spokesman Guo Jiakun reiterated Monday that “China and the US are not engaged in any consultation or negotiation on tariffs.” US Treasury Secretary, Scott Bessent put the responsibility for reaching a trade agreement on China. “I believe that it’s up to China to de-escalate, because they sell five times more to us than we sell to them, and so these 120%, 145% tariffs are unsustainable,” Bessent said during an interview on CNBC on Monday.
The US is negotiating with 18 important trading partners, with Bessent saying that some talks, especially with Asian countries, “are moving along very well.” Speaking Sunday on ABC News, Bessent said these partners include China which is undergoing a “special negotiation.” With the other 17, “we have a process in place, over the next 90 days, to negotiate with them,” Bessent said. “Some of those are moving along very well, especially with the Asian countries.” Last week Bessent said the US and South Korea could reach an “agreement of understanding” on trade as soon as this week. Bessent said on Monday, “I would guess that India would be one of the first trade deals we would sign. So watch this space.”
Senior Chinese officials on Monday outlined plans to support jobs and help exporters, while hinting at the possibility of more stimulus in light of rising trade tensions with the US. Authorities will provide financial support, including loan assistance and domestic consumption boosts, to exporters so they “will have more confidence to take orders,” Sheng Qiuping, vice minister of commerce, told reporters. The briefing came after the human resources ministry on Friday announced subsidies for companies that hire recent graduates, but did not specify an amount.
Shares in a swath of companies surged in Tokyo on Monday after a US$42bn plan to take car parts maker Toyota Industries private triggered hopes of a wider overhaul of Japan’s corporate landscape. Toyota Industries surged almost 23% even as investors scrambled to interpret what Toyota Motor Chairman Akio Toyoda’s proposal to buy out the company would mean for corporate governance at Japan’s largest business group. Toyota Motor shares jumped 3.6% higher.
Week Ahead - Apr 28th to May 4th
This week, investors will closely monitor developments in the ongoing US-China trade dispute and look for signs of a potential de-escalation. First quarter earnings season will also take centre stage, with major companies such as Apple, Microsoft, Amazon and Meta, set to release quarterly results. Investors will get plenty of fresh data this week on how the trade turmoil is affecting the American economy, including the first jobs report covering a period after President Trump’s “Liberation Day” tariffs announcement and an early readout on growth in the first three months of the year. The first estimate of US Q1 2025 GDP growth is expected to show a significant slowdown, with some forecasts even suggesting a possible contraction. Investors will also focus on PCE inflation data, and the ISM Manufacturing PMI. The PCE is the Federal Reserve’s preferred inflation gauge, and this readout comes a week before the Fed’s May 7 rate decision. Home price indices from S&P CoreLogic Case-Shiller are due today followed by a readout from the Conference Board on consumer confidence, and the Job Openings and Labor Turnover Survey (JOLTS) report. Saturday sees Berkshire Hathaway’s shareholder meeting. Warren Buffett is due to answer questions from stockholders at the so-called “Woodstock for capitalists.”
In Asia, the key event is the Bank of Japan’s (BoJ) monetary policy meeting which concludes on May 1. The BoJ is widely expected to keep interest rates unchanged. In Thailand, the central bank's Monetary Policy Committee is expected to cut the policy rate by 25 bps at its April meeting. In China, all eyes will be on April PMI readings. Moody’s Analytics said in a note Monday, “China's manufacturing PMI for April is likely to take a dive to 48.1 in the wake of Washington's reciprocal tariffs as businesses reassess their new orders and production utilisation. Domestic orders will remain resilient thanks to the Chinese stimulus.” The first estimate of Q1 GDP in Hong Kong will come on Friday with analysts projecting 2.5% y/y growth. In Australia, inflation data will be in the spotlight. Both Australia and Singapore go to the polls on Saturday, May 3 and in both contests, cost-of-living concerns loom large.
In Europe, market participants will analyse flash GDP data and inflation figures for the Eurozone.
Donald Trump Tells Canada To Vote For ‘51st State’
Polls have now closed in Canada, where federal elections took place Monday. The ruling Liberals, led by Mark Carney, are up against Pierre Poilievre’s Conservatives in a contest that has revolved around the question of how Canada will deal with President Trump. Surveys point to a victory for the Liberals and show Canadians prefer Carney on the key election issue - which candidate can best push back against Trump.
On Monday, Donald Trump blatantly intervened, calling on Canadians to elect a leader who will make the country the US’s 51st state as “it was meant to be”. Trump posted on Truth Social on Monday, “America can no longer subsidise Canada with the Hundreds of Billions of Dollars a year that we have been spending in the past” unless it is a US state. Trump called for an end to the "artificially drawn [border] line from many years ago", adding, "look how beautiful this land mass would be." The US president did not say who he wanted to win Canada’s election on Monday, but his comment will be welcomed by Mark Carney’s Liberal party, which has made Canadian sovereignty and opposition to Trump core themes of its pitch to voters. One Carney adviser described Trump’s post on Truth Social, his social media platform, as a “gift”. Conservative Party leader Pierre Poilievre told Trump to “stay out of our election”. Posting on X, Poilievre said the only people "who will decide the future of Canada are Canadians at the ballot box.”
For several years, the Conservatives dominated in polls over the governing Liberals, led then by an unpopular prime minister, Justin Trudeau. Then President Trump threatened to annex the country and imposed tariffs so steep that some economists foresee a recession. And he enraged Canadians, reversing the fortunes of each party. Liberals made Trump the centre of their campaign and rapidly took the lead. Voters began turning against Poilievre immediately, and his 20-plus-point lead evaporated. Now Carney’s Liberals have a four-point advantage in polls as the country votes. Elections Canada, the government agency that oversees the vote, reported that a record 7.3mn Canadians had already voted, a 25% increase from the previous election in 2021. This leaves another 21mn registered voters to cast a ballot on Monday.
Bessent: Trade Talks With Asian Countries ‘Moving Along Very Well’
The US is negotiating with 18 important trading partners, with Treasury Secretary Scott Bessent saying that some talks, especially with Asian countries, “are moving along very well.” Speaking Sunday on ABC News, Bessent said there are 18 important US trading partners, including China which is undergoing a “special negotiation.” With the other 17, “we have a process in place, over the next 90 days, to negotiate with them,” Bessent said. “Some of those are moving along very well, especially with the Asian countries.” Last week Bessent said the US and South Korea could reach an “agreement of understanding” on trade as soon as this week. Korean officials say they see early July as the initial deadline for any concrete deal to at least clinch tariff exemptions.
Countries including South Korea, Japan and India face levies rising to nearly 25% in just over two months' time. Vietnam’s is pegged at 46% and Thailand’s at 36%. According to trade experts, what’s looking likelier for these countries are smaller, interim deals to stave off punitive US tariffs before the 90-day grace period expires in early July. That would allow Donald Trump to tout quick successes from his trade policy.
In an interview with Time Magazine on Friday, Trump said he would view it as a “total victory” if the US still has high tariffs, “whether it's 20% or 30% or 50%, on foreign imports a year from now,” because “the country will be making a fortune.” Trump said in his explanation, “they're coming in because they don't want to pay the tariffs. . . . In Mexico, many car plants that were under construction have stopped. They're all coming into this country. We're gonna, you're gonna see car plants going at a level that you've never seen before. . . The tariffs are bringing in the business.”
Officials from the European Union came away from their initial discussions in Washington in mid-April convinced that there’s no negotiating away the 10% levy and that the US may double it to the so-called reciprocal level if there’s no progress when the 90-day grace period expires.
Japan spent more than a year negotiating a 2019 trade agreement with the US during the first Trump administration. Tokyo’s current top trade negotiator, Ryosei Akazawa, says the two sides have yet to agree on a full scope of negotiations ahead of his second trip to Washington for tariff talks, expected in the next few days. As Japan’s trade surplus with the US remains substantial, the scope of the negotiation is broad, ranging from agricultural products, national security and non-tariff barriers including what the Trump administration considers a very weak yen.
Meanwhile, India is perhaps the most advanced of any nation in its trade talks with the US. Bessent said on Monday, “I would guess that India would be one of the first trade deals we would sign. So watch this space.” The two sides have agreed on 19 areas for negotiation, including greater market access for goods and services such as agricultural products, and e-commerce, as well as issues related to corruption and rules of origin, according to Bloomberg News.
Southeast Asian economies have offered to buy more US farm products, including meat, soybean and fresh fruit, as well as import more of its natural gas. They’ve also pledged to lower tariffs on a range of US goods, such as steel, electronics and automobiles. Vietnam, which got hit with one of the highest reciprocal tariff rates, could also look to purchase Lockheed F-16 fighter jets as part of a trade deal. Indonesia’s Coordinating Economic Minister Airlangga Hartarto said on Friday that the government will also ensure domestic interests as the US asks for more market access, investment deregulation, as well as cooperation in critical minerals supply chains. But Thailand’s trade negotiations with the US were postponed after Washington asked Bangkok to address a set of “issues.” Thailand Prime Minister Paetongtarn Shinawatra said, “we’ll approach the talks with the mindset that we’ll give them something if they’re also willing to give us something.”
Trade Negotiations With China Unclear
The status of trade negotiations with China remains unclear. On Friday, Donald Trump insisted that President Xi had called him, adding, “I don't think that's a sign of weakness on his behalf.” However, Beijing denied that talks to ease trade tensions between the world’s two largest economies had started. Foreign Ministry spokesman Guo Jiakun said Friday that the US “should not mislead the public.” On Monday, he reiterated that “China and the US are not engaged in any consultation or negotiation on tariffs.”
On Sunday, when asked if the US and Chinese Presidents had spoken directly to each other, Scott Bessent said, “look, this was IMF-World Bank Week. They are in D.C., as you know. I had interaction with my Chinese counterparts, but it was more on the traditional things like financial stability, global economic early warnings. I don't know if President Trump has spoken with President Xi. I know they have a very good relationship and a lot of respect for each other. But, again, I think the Chinese will see this high tariff level is unsustainable for their business.”
On Monday, Bessent put the responsibility for reaching a trade agreement on China. “I believe that it’s up to China to de-escalate, because they sell five times more to us than we sell to them, and so these 120%, 145% tariffs are unsustainable,” Bessent said during an interview on CNBC’
Bessent reiterated the administration’s argument that Beijing will be forced to the negotiating table because China can’t sustain Trump’s latest tariff level of 145% on Chinese goods. Bessent told ABC, “I think that there is a path here. So the first path will be, again, a de-escalation, which I think the Chinese are going to have to have. Then I think there can be an agreement in principle.” Bessent added, “China has no business model. Their business model is predicated on selling cheap, subsidized goods to the US and if there's a sudden stop in that, they will have a sudden stop in the economy, so they will negotiate.
Chinese companies are finding ways to sidestep US tariffs, for example by engaging Indian exporters to fill orders on their behalf and help them retain their American customers. Several Indian firms have been approached by Chinese companies at the ongoing Canton Fair to supply goods to their US customers.
Meanwhile, the 145% tariff on Chinese goods has started to affect US ports and air freight. Bookings for standard 20-foot shipping containers from China to the US were 45% lower than a year earlier by mid-April, according to new data. The Port of Los Angeles, the main route of entry for goods from China, expects scheduled arrivals next week to be a third lower than a year before, while air freight handlers have also reported sharp falls in bookings. American importers are looking to use up inventories before importing fresh stock from China, logistics executives say. The industry is set to suffer a further hit if a US “de minimis” exemption, for goods under US$800, expires for China on Friday. The scheme is a key route for ecommerce retailers such as Shein and Temu.
In a sign of things to come, Shein hiked US prices by up to 377% ahead of tariffs on small parcels. The Chinese discount shopping app Temu appears to be passing on nearly all of Donald Trump’s new import taxes to US consumers, more than doubling the cost of some products. The higher costs illustrate the impact of the tariffs, potentially disrupting how Americans shop and adding to concerns about inflation.
China Rolls Out Employment & Trade Support Measures
Chinese officials on Monday reiterated their plan to strengthen support for employment and the economy. The country is confident of reaching economic targets this year, officials said despite the trade war with the US. The People’s Bank of China also said it will maintain ample liquidity in the markets and will cut banks’ reserve requirements and interest rates in a “timely manner.”
Senior Chinese officials on Monday outlined plans to support jobs and help exporters, while hinting at the possibility of more stimulus in light of rising trade tensions with the US. Authorities will provide financial support, including loan assistance and domestic consumption boosts, to exporters so they “will have more confidence to take orders,” Sheng Qiuping, vice minister of commerce, told reporters. The briefing came after the human resources ministry on Friday announced subsidies for companies that hire recent graduates, but did not specify an amount.
“Labor market stability remains a critical concern for Chinese policymakers, given its direct linkage to social stability and consumption recovery,” Goldman Sachs analysts said in a report Sunday. They estimate around 16 million jobs in China are involved in the production of goods exported to the US. China’s urban jobless rate among those aged from 16 to 24, excluding students, stood at an elevated level of 16.5% in March, according to data from the National Bureau of Statistics. That marked a modest dip from 16.9% in the prior month. The overall unemployment rate for the working-age population in cities eased slightly to 5.2% in March from a two-year high of 5.4% in February.
On Friday, the Politburo, the Chinese Communist Party's top policymaking body, said it aims to implement more growth-supporting measures to support consumption, technology and trade, amid rising challenges from hefty US tariffs. The government aims to coordinate policy measures to support the domestic economy, the state-run Xinhua News Agency said Friday, citing a readout of a meeting of the Politburo. Such steps could allow for faster deployment of low-cost credit for investment in targeted areas.
Beijing also intends to cut interest rates, and the amount of cash banks must set aside at the central bank, the Politburo said. But the government will take a patient approach, with no rush to expand economic stimulus, and will "pick the timing" for rate cuts and reserve requirement ratio cuts. Over the weekend, China’s finance minister Lan Fo’an said that the country will “adopt more proactive macroeconomic policies to promote the realization of the expected growth target for the whole year and continue to bring stability and momentum to the global economy,” in a statement posted on the ministry’s website.
President Xi Jinping said on Friday Beijing had to “fully prepare emergency plans” to boost the economy. Xi called on the government to increase support to businesses, accelerate efforts to boost consumption and more quickly resolve a years-long downturn in the property sector. Officials should “coordinate domestic economic work and international economic and trade struggles”, he said.
China Says It Can Live Without US Farm & Energy Goods
Also at Monday’s press briefing, China’s top economic officials said the country could do without American farm and energy imports. Zhao Chenxin, vice chair of the National Development and Reform Commission, China’s state planner, said domestic farm and energy production, along with imports from non-US sources, would be more than enough to satisfy demand. “Even if we do not purchase feed grains and oilseeds from the United States, it will not have much impact on our country’s grain supply,” Zhao said. He added that US agricultural imports were “primarily for feed grains, which were highly substitutable” and noted there would be limited impact on China’s energy supplies if companies stopped importing American oil, natural gas and coal.
The loss of the Chinese market would be a substantial hit for US farmers, who shipped roughly US$33bn of agricultural goods to the country in 2023. The US also sent about US$15bn of oil, gas and coal to China.
China’s Huawei Develops New AI Chip, Seeking To Match Nvidia
The Wall Street Journal reported Monday that China’s Huawei is getting ready to test a powerful new AI chip that it hopes can replace some products made by Nvidia. Huawei is preparing to test its Ascend 910D AI processor, aiming to rival Nvidia’s high-end chips. The steady advance by one of China’s flagship technology companies points to the resilience of the country’s semiconductor industry despite efforts by Washington to stymie it, including by cutting off access to some Western chip-making equipment. Huawei has approached some Chinese tech companies about testing the technical feasibility of the new chip, called the Ascend 910D, the WSJ reported. The company is slated to receive the first batch of samples of the processor as soon as late May. The development is still at an early stage, and a series of tests will be needed to assess the chip’s performance and get it ready for customers, the report said. Huawei hopes that the latest iteration of its Ascend AI processors will be more powerful than Nvidia’s H100, a popular chip used for AI training that was released in 2022.
Hutchison Panama Ports Deal In Limbo
China has dialled up scrutiny of CK Hutchison's plan to sell its Panama ports to a BlackRock-backed group, putting the deal that’s been a major focus of the Trump administration in limbo. China's market regulator said Sunday it is reviewing Hutch’s sale of dozens of ports, including two in Panama, and says the deal shouldn't be implemented without its approval. China’s foreign ministry urged all parties in the controversial sale of CK Hutchison Holdings’ overseas ports to “act prudently” and stay in touch with Beijing amid a report that the Hong Kong conglomerate’s two Panama Canal facilities may be separated from the deal.
Although the transaction only concerns CK Hutchison’s assets outside of China and Hong Kong, the review is seen as an assertion of Beijing's control over businesses based in the Greater China region and comes amid escalating tensions between the US and China over the Panama Canal. The deal's future is in doubt due to opposition from China, which is unhappy with Li Ka-shing's plan to sell the ports to a US-backed group, and the US, which is seeking preferential treatment for its ships in the Panama Canal.
Trump started pushing for the US to “reclaim” the waterway soon after taking office this year, and the latest statements from Beijing follow his call for “free of charge” passage of American ships through the Panama and Suez canals. “Those Canals would not exist without the United States of America,” Trump wrote in a Truth Social post on Saturday, saying he had asked Secretary of State Marco Rubio to “immediately take care of” the situation.
Hong Kong Home Prices Fall For Fourth Month In A Row
Hong Kong's lived-in home prices fell for the fourth month in a row and remained at their lowest level in almost nine years, as uncertainties over global trade curbed investment appetite. Data from the city’s Rating and Valuation Department on Monday showed the city's official home price index dropped to 284.2 in March. That’s the lowest since July 2016, when the gauge stood at 281.7. On a month-on-month basis, the index was 0.5% lower and 7.8% lower year-on-year. The index has fallen 29% from the market peak in September 2021. Over the first quarter in total, the index fell by 1.7%. Rents, however, continued to go up, with the key gauge rising by 0.1% last month to 193.3.
Hong Kong Trade Grows At Fastest Pace In 16 Months
Authorities on Monday said Hong Kong's March trade figures grew at the fastest pace in 15 months, despite ongoing trade tensions with the United States. Exports from Hong Kong soared 18.5% year-on-year to an over three-year high of HK$455.5 billion (US$58.7bn) in March, following a 15.4% gain in the previous month. It also marked the strongest annual growth in export activity since January 2024, as exporters rushed to fill orders in anticipation of US tariffs. Shipments to China, the biggest trading partner, rose by 25.4%, to the US by 11.4% and to Vietnam by 41.3%. The value of total imports of goods, meanwhile, rose 16.6% from a year earlier to HK$500.9 billion last month. Exports increased by 10.9% year-on-year in the first three months of the year, while imports were up 9.8% for the period. Hong Kong’s trade deficit widened to HK$45.4 billion in March from HK$45 billion in the corresponding month of the previous year, to mark the largest trade gap since September 2024.
Taiwan Consumer Confidence Falls To 1-Year Low
Taiwan's consumer confidence index dropped to 68.21 in April, its lowest level in a year, from 71.86 in the previous month. Sentiment weakened across all sub-indices, with the largest decline observed in the timing of stock investment (38.64 vs 49.89 in March), followed by the timing of durable goods purchases (99.13 vs 101.99), domestic economic prosperity (84.09 vs 86.8), family financial conditions (79.49 vs 81.94), employment opportunities (73.02 vs 75.25), and expectations for prices (34.91 vs 35.26).
Singapore Q1 Jobless Rate Highest In A Year
Singapore’s seasonally adjusted unemployment rate rose to 2.1% in Q1, up from 1.9% in the previous three quarters, according to a flash estimate. This marked the highest jobless rate in a year, driven by slowing economic activity and escalating global trade tensions. Total employment growth slowed significantly (2,300 vs 7,700 in Q4) and 3,200 in Q1 2024, as both resident and non-resident employment eased. The decline in employment, especially in export-oriented sectors, indicated a shift in labour market dynamics. Looking ahead, the worsening economic outlook is expected to impact firms’ hiring and wage expectations. Forward-looking polls by the government in March found that business moods became more cautious, compared to the more optimistic view in December 2024.
Malaysia Producer Prices Drop For First Time In 4 Months
Producer prices in Malaysia fell by 1.9% y/y in March, reversing a 0.3% gain in the previous month and marking the first decline since last November. The drop was primarily driven by the mining sector, which saw a 15.0% decline (vs -9.7% in February). Manufacturing also experienced a decline, falling 1.8% after a 0.3% drop in February. On a monthly basis, producer prices declined 0.6%, following a 0.1% increase in February.
Asian Markets Mixed
Markets in the Asia-Pacific region were mixed Monday after US Treasury Secretary Scott Bessent told ABC News that trade discussions with Asian countries are “moving along very well.” Investors are also awaiting signs of further stimulus from China. On the economic front, traders will be looking at the Bank of Japan’s rate decision, and the US jobs report and GDP data. It will also be a busy week for earnings. Four of the so-called Magnificent Seven - Microsoft, Apple, Meta Platforms and Amazon - are due to report earnings this week. Analysts expect the group, which also includes Google-parent Alphabet, Tesla and Nvidia, to deliver an average of 15% profit growth in 2025.
In Japan, the Nikkei 225 closed 0.4% higher at 35,840. Japan’s benchmark Topix Index rose to erase all losses triggered by Donald Trump’s so-called reciprocal tariff announcement. The Topix gained 0.9% to close at 2,650.61, just above its close on April 2, before the new US levies were announced.
Shares in a swath of companies surged in Tokyo on Monday after a US$42bn plan to take car parts maker Toyota Industries private triggered hopes of a wider overhaul of Japan’s corporate landscape. Toyota Industries surged almost 23% even as investors scrambled to interpret what Toyota Motor Chairman Akio Toyoda’s proposal to buy out the company would mean for corporate governance at Japan’s largest business group. Toyota Motor shares jumped 3.6% higher.
The move sparked price gains in other Japanese stocks that could receive similar offers. Investors are placing bets on subsidiaries and affiliates that they think might also come under pressure to change their ownership relationship in the coming years. Aichi Steel shares rose 16.1%, while others including Daihatsu Diesel (+4.1%), Toyoda Gosei (+1.6%) and Aisin (+3.5%) all rose. Other big industrial groups that could also accelerate discussions over potential acquisitions or buyouts of listed subsidiaries were in focus. Shares in Sumitomo Densetsu, which is 50% owned by Sumitomo Electric, soared 9.0%.
In South Korea, the Kospi index edged up 0.1%. Singapore’s benchmark Straits Times Index fell 0.3%, extending its losses for the third consecutive session. Australia’s S&P/ASX 200 ended the day 0.4% higher to close at its highest level in seven weeks. Indian stocks rose on Monday, reversing course from losses in the previous two sessions. The BSE Sensex gained 1.3% to close at 80,218. Shares of Indian conglomerate Reliance Industries surged 5.3%, following its better-than-expected fourth quarter profit.
Several Asian tech giants posted losses on Monday, ahead of a heavy earnings week in the U.S. Losses in Japan were led by Advantest which tumbled 4.8%. Declines were also seen in Renesas Electronics which dropped 3.0%, Lasertec which declined 2.2% and SoftBank which slid 0.7%. In South Korea, SK Hynix closed 1.3% lower while Samsung Electronics was up 0.2%.
Chinese Stocks Lower
Equities in China and Hong Kong fluctuated between gains and losses Monday before ending the day lower with no sign of progress in talks between Beijing and Washington. Traders digested a key press briefing in China following Friday's Politburo meeting. Officials promised to support exporters and workers affected by US tariffs while preparing contingency plans for the broader Chinese economy. China’s finance minister Lan Fo’an said the nation will adopt more proactive and effective policies to achieve its growth target and “bring stability and impetus to the global economy,” in a statement posted on the ministry’s Website on Saturday.
The mainland’s CSI 300 ended the day 0.1% lower at 3,782. China’s markets have been more stable than US counterparts since Trump rolled out sweeping tariffs on April 2. Earlier this month, China’s stock market rebounded after a big selloff as state-linked funds known as “the national team” bought assets. While the benchmark CSI 300 Index of Chinese equities is down less than 1% since Trump was inaugurated, the S&P 500 has slid more than 8%.
In Hong Kong, the Hang Seng Index lost 9 points, or under 0.1% to close at 21,972. The city’s benchmark index is down 5% in April. The Hang Seng is among the worst performers in Asia since the April 2 US tariff onslaught.
The Hang Seng Tech Index closed 0.1% higher Monday. Tech names in Hong Kong were mixed Monday. Losses were seen in BYD which tumbled 4.0%, Xiaomi which lost 0.4%, Xpeng which fell 0.9% and Baidu which was down 0.8%. Elsewhere, gains were seen in Meituan which closed 0.6% higher, SenseTime which added 2.2% and JD.com which advanced 2.2%. Tencent was flat on the day.
CK Hutchison fell 0.6% after mainland China’s market regulator warned on Sunday that the company and other parties involved in the politically charged sale of its port assets should not circumvent an ongoing antitrust probe into the deal.
Shares of Hong Kong-listed brokerage Bright Smart Securities & Commodities Group surged 82% on Monday, following an announcement that Ant Group will acquire a controlling stake for HK$2.81 billion (US$$362mn). This will give the fintech firm a 50.55% stake in Bright Smart, the companies announced in a joint statement on Monday.
European Stocks Higher
European markets were higher with nearly all sectors in the green on Monday, as investors brace for a slew of major earnings and data releases both in Europe and the US this week. The pan-European Stoxx 600 rose 0.5%, with the travel and banking sectors leading the gains. London’s FTSE 100 climbed 0.4%, its eleventh straight session in the green and its best winning run since December 2019, when the index also closed higher for eleven sessions in a row. This week, French and German GDP and inflation data out Wednesday will be closely watched, as well as earnings from HSBC, BP, Deutsche Bank and Shell.
Spain declared a state of emergency after most of Spain and all of Portugal were hit by a major blackout that impacted public transport, airports and phone service, leaving authorities scrambling to find the causes for one of the worst outages in Europe in years. The outage, which hit millions of people, was due to sharp swings in power on the network, known as oscillations, according to national grid operator Red Electrica. More than 30% of Spain's power demand has been restored, Red Electrica said, after Prime Minister Pedro Sánchez said the cause of the outage is still being investigated.
European shares were energised by M&A news out of Italy as Mediobanca made a €6.3 billion (US$7.1bn) offer for the wealth management arm of Italian insurer Assicurazioni Generali. Shares of Mediobanca fell 0.8% in Milan while Assicurazioni Generali fell 1.1%. Deliveroo shares shot up 16.5%, hitting their highest level since January 2022, after the food delivery firm suspended a share buyback following a US$3.6 billion offer from US firm DoorDash. Shares of Airbus rose 2.7% in Paris after it announced it had finalized a deal to take on a batch of assets from struggling US supplier Spirit AeroSystems, largely related to European production of its own commercial aircraft. Shares of Traton, the truck- and bus-maker majority owned by Germany's Volkswagen, jumped 7.1% after the company reported lower quarterly sales but a growing order book.
US Stocks Rise For Fifth Day Ahead Of Tech Earnings
Four Big Tech firms - Apple, Microsoft, Amazon and Meta - report earnings this week. Analysts expect the Magnificent Seven as a whole to deliver an average 15% profit growth in 2025, a forecast that’s barely budged since the start of March despite the flareup in trade tensions. Google parent Alphabet posted strong quarterly earnings last week but warned of coming headwinds from the end of the “de minimis" trade loophole. The exemption for shipping lower-value goods is due to end Friday. In addition, the monthly jobs report and GDP data will provide clues on the economy. “The focus this week will be on how much this tariff stress has hit real-world decision-making,” ING analysts said Monday.
Helped by gains in Alphabet and Tesla stocks, the Nasdaq Composite rose 6.7% last week. That returned the tech-heavy index to positive territory for April. The S&P 500 finished the week 4.6% higher, closing above 5500 for the first time since the Trump administration unveiled its new tariff regime on April 2. The Dow industrials added 2.5%. However, the S&P 500 Index is down about 8% since Trump’s inauguration and on track for its worst run during a president’s first 100 days since Gerald Ford in 1974, following Richard Nixon’s resignation. The S&P 500 tumbled into its seventh-fastest correction since 1929. “It was an extreme, for-the-textbooks, systematic risk in its purest form,” said Mark Malek, chief investment officer at Siebert. “The volatility has been wholly different from anything we have experienced in the past, and it indiscriminately spread through all sectors and asset classes like a wildfire, constantly being fuelled by random sound bites and shifting policy moves.”
On Monday, US stocks were in a holding pattern ahead of those tech earnings and economic data but eked out small gains to close higher for a fifth day. The S&P 500 index gained 0.1% to close at 5,529. The Dow rose 114 points, or 0.3%, to settle at 40,228. The Nasdaq Composite ticked 0.1% lower and ended at 17,366. Nvidia led the Magnificent Seven stocks into the red with a drop of 3.5% after The Wall Street Journal reported that Huawei Technologies will be soon testing its latest AI processor, which the company hopes could be a competitor to some of Nvidia’s products. Microsoft slipped 0.2% while Amazon was off 0.7%. Apple and Meta Platforms ended the session modestly higher, each up about 0.4%. Tesla rose 0.3%.
So far in April, the S&P 500 is down by more than 1%, sitting roughly 10% below its all-time high reached in late February. The Dow is on track to lose more than 4% month-to-date, while the Nasdaq Composite is up around 0.4%.
IBM on Monday announced it will invest US$150 billion in the US over the next five years, including more than US$30 billion to advance American manufacturing of its mainframe and quantum computers. “We have been focused on American jobs and manufacturing since our founding 114 years ago, and with this investment and manufacturing commitment we are ensuring that IBM remains the epicentre of the world’s most advanced computing and AI capabilities,” IBM CEO Arvind Krishna said in a release. Shares of IBM rose 1.6%.
Treasury Yields Slip Ahead Of Key Economic Data
The yield on the US 10-year Treasury note slipped 4 bps to 4.21% on Monday, as investors braced for key economic reports this week that could provide insight into the early effects of President Donald Trump’s tariffs. Markets are focused on Friday’s April jobs report, along with first-quarter GDP figures and the Fed-preferred PCE inflation gauge on Wednesday. Weaker-than-expected data could bolster expectations for earlier interest rate cuts by the Federal Reserve, with markets currently pricing in a 25 bps cut in June and anticipating a total of three cuts by year-end.
US Dollar Lower
The US Dollar Index fell 0.7% 99.59 on Monday. The Japanese yen rose 1.2% toward ¥142 per dollar on Monday, after losing 1.1% last week as the dollar strengthened.
The offshore yuan was unchanged at Rmb 7.2850 per dollar following Beijing’s decision to hold off on new stimulus measures amid ongoing trade uncertainties. While China remained confident in meeting its 5% growth target for the year, it refrained from announcing immediate stimulus actions. Instead, authorities indicated that pro-growth policies would be introduced in the second quarter, as part of a strategy to remain flexible amid the tariff war with Donald Trump's administration and gauge its trade impacts.
The euro traded 0.5% higher at $1.1421, just below the three-year high of $1.1573 reached on April 21, as investors braced for a busy week of economic data and continued to monitor developments on the trade front. Sterling was 1.0% firmer at a new seven-month high of $1.3443.
Gold Rebounds
Gold rebounded from early losses as traders unwound positions on signs the metal’s advance may have run too far and too fast. The precious metal closed 0.7% higher at $3,344 per troy ounce. Gold reached a record high last week of $3,500 as investors awaited clarity on US tariff negotiations with its trading partners.
Brent Crude Oil Slumps Below $66
Brent crude oil futures slumped 1.8% to $65.65 per barrel on Monday as traders analysed the latest developments in the trade war. While it remains unclear whether formal trade negotiations between the US and China have begun, President Donald Trump softened his rhetoric last week, and Beijing exempted some US imports from its 125% tariffs. However, potential gains are limited by concerns of a supply glut. Progress in US-Iran talks over Tehran’s nuclear program raised the possibility of increased Iranian oil exports if sanctions are lifted. Additionally, the potential for OPEC+ to ramp up production for a second consecutive month added further bearish sentiment.
Imports of crude oil into China surged in March and have continued to accelerate in April, according to analysts, as the country replenishes stocks despite expectations that a weaker global economy will reduce demand. Kpler, a data company that tracks tankers sailing into China, said the country was importing nearly 11mn barrels a day, the highest level in 18 months and up from 8.9mn b/d in January. What started as a buying spree of Iranian oil, on fears of further US sanctions, has developed into a broader stockpiling of crude after Trump’s tariff announcements, coupled with an increase in production by oil cartel Opec, sent prices sliding to a four-year low. Morgan Stanley believes prices will remain under pressure, falling to an average of $62.50 a barrel in the second half of the year.
Bitcoin Slides After Crossing $95,000 In Previous Session
Bitcoin fell Monday, reversing course from gains in the previous session when it crossed $95,000. The cryptocurrency fell 0.2% to $94,500.
Peter Lewis’ Money Talk Podcast
On Tuesday’s “Peter Lewis’ Money Talk” podcast, I’ll be joined by Mark Michelson, Chairman of the Asia CEO Forum at IMA Asia, Samuel Faveur, Chief Executive Officer at Mandarin Capital, and in Washington D.C., our US Economics Correspondent, writer & broadcaster, Barry Wood.
The podcast is also available on Apple Podcasts, YouTube Studio and Spotify.
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https://www.youtube.com/playlist?list=PLnwqOJD9ie5gHH29bNfuG1Nscy8rdJo6O
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This podcast is sponsored by Surfin Group, which is headquartered in Singapore and offers online financial services to 60 million customers across 10 countries. You can find out more about them by going to their website www.surfin.sg
