Asian Markets Are Weak amid Trade War Concerns

• 9:30 AM EST: FOMC member Kashkari speaks
• 9:45 AM EST: US ISM – NY Business Conditions (March)
• 11:30 AM EST: US four-week bill auction
• 4:30 PM EST: US API weekly crude oil stock
• 4:30 PM EST: FOMC member Brainard speaks
• 7:01 PM EST: U.K. BRC Shop Price Index
• 9:45 PM EST: China Caixin services purchasing managers’ index

After a brief rebound last week, China’s Shanghai Composite Index started this week on a mixed note. After a failed attempt to trade above the important price level of 3,200, the Shanghai Composite Index opened lower on April 3 and ended the day in losses.

The market sentiment is weak amid China’s announcement of import tariffs on US products. China imposed up to 25% import tariffs on 128 US products including frozen pork, wine, and nuts. China’s retaliating against President Trump’s plan to impose 25% import tariffs on steel and aluminum in March. Trade war concerns dented the market sentiment this week. An inspection of large client loan data by Beijing’s banking regulator weighed on the banking sector and the market as a whole. Agriculture-related stocks that could benefit from new import taxes, especially pork producers, were strong on Tuesday.

The Shanghai Composite Index declined 0.84% and closed the day at 3,136.63 on April 3. The SPDR S&P China (GXC) declined 2.4% on April 2.

After declining for two weeks, Hong Kong’s Hang Seng Index started this week on a mixed note. The Hang Seng Index opened lower on April 3 amid weakness in technology stocks and global trade war concerns. The index maintained the weakness in the morning session. However, the release of stronger-than-expected retail sales data along and the strong performance of consumer goods stocks helped the market recover and end the day with limited gains.

The Hang Seng Index gained 0.19% and closed at 30,150.00. The iShares MSCI Hong Kong (EWH) declined 1.3% on April 2.

Following a strong performance last week, Japan’s Nikkei Index started this week on a mixed note. The Nikkei Index opened lower on Tuesday amid weak Asian market sentiment. The index rose until the market closed and ended the day with limited losses. Weakness in the banking, paper and pulp, and railway and bus sectors weighed on the market. The Nikkei Index declined 0.45% on Tuesday and closed the day at 21,292.29. The iShares MSCI Japan (EWJ) declined 2.0% on April 2.

Next, we’ll discuss how European markets performed in the morning session.