The market probably “shrugs at this news,” Morningstar says of Trump’s revised tariffs
Lorrainetan, an equity research director at Morningstar, mentioned that President Trump’s updated tariff responsibilities concerning Asia are somewhat anticipated, suggesting a minimal impact on the market.
“The current rates of 15% for major exporters like South Korea and Japan, and 19% for Southeast Asian countries, are quite reasonable—especially following the significant shift on April 2nd,” she noted in a memo last Friday.
Tan explained that US-China negotiations are the primary focus now.
“Investors might see the newly extended 90-day timeline between the US and China as a challenge, especially since the framework has seemed established for the last three months amidst ongoing discussions,” remarked Kai Wang, Morningstar’s Asian equity strategist, in a report on Friday.
“This extension hints at potential hurdles that could completely thwart Trump’s indirect approach to targeting China, especially through transshipping and other loopholes,” Wang added. The Hangsen index and the CSI 300 index have largely reflected this trend over the past couple of days.
Indian stocks will be traded early
On Friday, Indian stocks dropped in early trading.
The benchmark NIFTY 50 saw a decline of 0.35%, while the BSE Sensex index fell by 0.34% as of 9:30 AM India standard time.
Asian tech giants fall primarily as investors consume Wall Street technology revenue
Most major tech firms in the Asia-Pacific sector saw declines on Friday, influenced by significant technology-related revenues reported on Wall Street and new developments from President Trump regarding tariffs in various countries.
In Japan, the Tokyo Electronics stock dropped by 17%, leading to notable losses in the tech sector.
Another notable slip was Lasertec with a 4.67% decrease, while Advantest Corp experienced a drop of 2.51%. SoftBank Group also fell by 2.07%. In contrast, Renesas Electronics managed a slight increase of 0.7%.
Over in South Korea, SK Hynix plunged by 5.12%, with Samsung Electronics falling by 1.92%.
Taiwan’s TSMC saw a reduction of 1.72%, while Hon Hai Precision Industry (Foxconn) rose by 1.12%.
In Hong Kong, the tech index settled down 0.23%, with some of the biggest decliners including China Petroleum & Chemicals Co., down by 5%, and Zhongsheng Group Holdings, which fell 3.02%. Li Auto plummeted by 2.6% as per LSEG data.
China’s manufacturing activity will shrink, Caixin PMI shows
China’s factory activity has declined in July, with new business growth slowing as manufacturers adjusted production based on uncertainties in the US market.
The CAIXIN/S&P Global Services Purchasing Managers Index (PMI) slid from 50.4 to 49.5, indicating a contraction after failing to meet expectations.
Jingyi Pan, an Economics Associate Director at S&P Global Market Intelligence, described this as the second decrease in manufacturing since October 2023.
While domestic business growth helped sustain new job creation, foreign demand remained low amid ongoing global trade uncertainties. Additionally, companies reduced selling prices in response to rising costs.
Asia-Pacific currencies depreciate primarily against greenback
Currencies in the Asia-Pacific region fell against the US dollar on Friday, following Trump’s modifications to tariff rates across several countries.
The US Dollar Index, which measures the dollar against six major currencies, rose by 0.11% to 100.73.
The Japanese yen remained steady nearby at $150.75, while the Australian dollar held close to 0.6427 against the greenback.
After hitting almost two-month lows early on, China’s offshore yuan dipped by 0.11%. The Taiwanese dollar and South Korea’s won saw declines of 0.35% and 0.53%, respectively.
In Southeast Asia, the Singapore dollar showed little change at 1.284, while the Thai baht decreased by 0.24% to 32.81. The Philippine peso also dropped by 0.49% to 58.494, and the Malaysian ringgit fell by 0.42% to 4.278.
Chinese stocks will be traded early
Mainland Chinese stocks opened lower on Friday, reflecting wider losses seen across other Asia-Pacific markets.
The CSI 300 index was flat as of 10:02 AM local time, while Hong Kong’s Hangsen index slipped by 0.16%.
Korean stocks fall by more than 2%
South Korea’s stocks extended their downward trend for a second consecutive session on Friday as investors digested President Trump’s latest tariff announcements. The Kospi index plummeted by 2.3% as of 9:40 AM local time.
The smaller Cosdaq Index also reported a loss of 2.8% amidst broad declines in tech, manufacturing, retail, finance, and gaming sectors.
In terms of major companies, Samsung Electronics dipped by 0.56%, while SK Hynix fell by 4.57%.
Japan’s June unemployment rate has not changed at 2.5%
Japan’s unemployment rate remained at 2.5% in June, according to government data released on Friday, matching economists’ forecasts.
However, the job availability ratio decreased to 122 job openings for every 100 job seekers, down from 124 the previous month and missing median projections.
The labor market in Japan has faced challenges for over a decade, with ongoing demographic issues exacerbating the situation in recent years.
Asia Pacific Market is Lower Day
The Asia-Pacific markets opened lower on Friday.
The Nikkei 225 index in Japan declined by 0.65%, while the broader Topix index remained flat.
Korea’s Kospi index fell by 1.73%, with the small Kosdaq dropping 2.1%. In Australia, the S&P/ASX 200 index also showed a downturn of 0.94%.
This is the opening call for the day
Good morning from Singapore, and here’s to a productive Friday.
Investors are currently assessing the latest developments regarding US tariffs, alongside June’s Japanese employment statistics and manufacturing data from various countries.
The Nikkei 225 benchmark futures in Chicago were trading at 40,785, while its Osaka counterpart stood at 40,760, down from 41,069.82 at the end of Thursday’s session.
Futures for Hong Kong’s Hangsen Index showed a potential weaker opening at 24,708 compared to its close of 24,773.33.
The Australian S&P/ASX 200 was set to commence the day lower, showing preliminary futures aligned with 8,632 against the previous close of 8,742.80.
US stock futures slipped just as investors await work reports
US stock futures dipped early Friday after investors processed significant technology revenues from the previous night and looked ahead to the July employment report.
Futures connected to the S&P 500 fell by 0.19%, while those for the Nasdaq 100 dropped by 0.3%. The Dow Jones industrial average futures remained relatively unchanged.
Stock is low, S&P 500 slides for the third straight session
Stocks concluded the day on Thursday with the S&P 500 experiencing its third consecutive decline.
The main market index decreased by 0.37% to end at 6,339.39, while the Nasdaq composite saw a slight drop of 0.03% to 21,122.45. Meanwhile, the Dow Jones industrial average fell by 330.30 points (0.74%), closing at 44,130.98.
