Asia-Pacific share markets are plummeting sharply following the US president’s last week’s announced tariffs. Donald Trump said it doesn’t bother him, comparing the markets’ decline to a reaction to the ingestion of “necessary medicine.”
Large share indices in the region – from Tokyo to Shanghai and Sydney to Hong Kong – dropped shortly after Monday’s markets opened.
By midday, Japan’s Nikkei 225 stock market index had dropped 6%, Australia’s ASX 200 had dropped 4% and South Korea’s Kospi had dropped 4.7%.
The Shanghai Composite was down more than 6%, while Hong Kong’s Hang Seng and Taiwan’s TAIEX had dropped about 10%.
The MSCI Asia Pacific index of large and mid-cap stocks in 13 Asia-Pacific nations recorded its biggest drop since 2008 (down 7.1%), while Japan’s Nikkei 225 broke the bear market zone – i.e. 20% or lower from its previous peak.
As the stock markets in mainland China, as well as those in Hong Kong and Taiwan, were closed last Friday for holidays, the investors did not react to the international plunge until Monday, so the fall was particularly steep.
Due to the fact that it is in Asia that most of the products that are traded around the world are manufactured, Asian countries and territories will be directly affected by the tariffs imposed by the US. They are also extremely sensitive to the threat that a global trade war will lead to a slowdown or even a recession in the world’s largest economy.
