Nikkei plunge nears 9% as Japanese bank stocks plummet
Japan’s Nikkei share average tumbled nearly 9% early on Monday, while an index of Japanese bank stocks plunged as much as 17%, as concerns over a tariff-induced global recession continue to rip through markets.
The Nikkei dropped as much as 8.8% to hit 30,792.74 for the first time since October 2023. The index was trading down 7.3% at 31,318.79, as of 0034 GMT, Reuters reports.
All 225 component stocks of the index were trading in the red.
The broader Topix sank 8% to 2,284.69.
A topix index of banking shares slumped as much as 17.3%, and was last down 13.2%.
The bank index has borne the brunt of the sell-off in Japanese equities, plunging as much as 30% over the past three sessions.
Key events
What’s been the reaction of analysts to today’s drubbing of Asian share markets and US stock futures in response to the Trump tariffs?
Here’s a range of voices, care of Reuters, on the continuation of a two-day selloff as fears of a global trade war led investors to ramp up bets on the risk of recession and a US interest rate cut as early as next month.
TONY SYCAMORE, MARKET ANALYST, IG, SYDNEY
Things have gone from bad to worse this morning. The lack of reaction from Trump and from Bessent, in terms of their concern levels appearing to be very, very low in terms of the market dislocation. If there isn’t some sort of walking back of the announcements, then we’re heading for a liquidity event and liquidity will get sucked out of these markets big time across all asset classes. We’re already seeing that. We’re going to see obviously the US dollar return to being the kingmaker except against the yen.
CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE
The lack of any policy response from the Trump administration on the market sell-off is adding to the uncertainty, reinforcing the idea that the current trajectory may remain unchanged in the near term. Unless we see a clear pivot from policymakers, volatility is likely to stay elevated, and the path of least resistance for risk assets remains to the downside.
MATTHEW RUBIN, CHIEF INVESTMENT OFFICER, CARY STREET PARTNERS, NEW YORK
One of the things that clearly clients have more exposure to today is private markets … there’s a little bit more control there in the private markets of the portfolio because you take out some of the daily trading and the daily volatility. I think that’s important. I wouldn’t call that a refuge, though.
This didn’t come out of some sort of exogenous risk that was uncovered. This is being brought on because of the tariffs. And none of us know when we’ll see more clarity or resolution, whether it be further negotiation and whether this is really about negotiation or whether this is about a fundamental change to try to reshape the manufacturing economy here in the US.
DEAN FERGIE, DIRECTOR, CYAN INVESTMENT MANAGEMENT, MELBOURNE
I expect a lot of panic selling this morning but over the coming days some level of rationality should prevail and we’ll see some buying support come in. The sectors to watch will be the financials/fund managers impacted by global market weakness, and the global discretionary stocks.
Continued next post
Among the governments already signalling a willingness to engage with the US to avoid Trump’s tariffs, Taiwan’s president has offered zero tariffs as the basis for negotiations.
On Sunday Lai Ching-te pledged to remove trade barriers and said Taiwanese companies would raise their US investments.
The Israeli prime minister, Benjamin Netanyahu, said he would seek a reprieve from a 17% tariff on the country’s goods during a planned meeting with Trump on Monday, Reuters reports.
An Indian government official said the country did not plan to retaliate against a 26% tariff and that talks were under way with the US over a possible deal.
In Italy, the prime minister, Giorgia Meloni – a Trump ally – pledged on Sunday to shield businesses that suffered damage from a planned 20% tariff on goods from the European Union.
Italian wine producers and US importers at a wine fair in Verona on Sunday said business had already slowed and feared more lasting damage.
India’s benchmark Nifty 50 is poised to open sharply lower on Monday.
The GIFT Nifty futures were trading at 22,089 as of 7:55 am IST, indicating that the blue-chip Nifty 50 will open about 3.6% lower than Friday’s close of 22,904.45, Reuters is reporting.
“We see the recent lows around 21,800 get re-tested on the Nifty 50 given this week’s price action,” said Abhishek Goenka, chief executive officer of India Forex and Asset Management.
We remain cautious in the near term given the tariff-related uncertainty.
Other Asian markets have slumped amid the worries of a global trade war and a US recession triggered by the Trump Administration’s tariffs regime.
India’s central bank is widely expected to cut rates by 25 basis points amid expectations that monetary policy may turn more supportive as the tariffs threaten to hurt the economy.
The Nifty 50 is trading about 13% lower than the record high levels hit in late September, as slowing earnings and growth triggered a $27-billion foreign exodus from domestic markets.
Meanwhile, India is likely to meet its projected growth target of 6.3-6.8% for the fiscal year 2025-26 if oil prices remain below $70 a barrel, despite the global disruptions due to US tariff announcements, a finance ministry official said.
China base metal prices tumble
Base metal prices in China fell sharply on Monday amid the escalating global trade war, with copper prices sliding to a more than three-month low.
The most-traded copper contract on the Shanghai Futures Exchange (SHFE) dropped 7% to 73,640 yuan per metric ton as of 0138 GMT, marking its lowest level in over three months since 3 January, Reuters reports.
The benchmark three-month copper on the London Metal Exchange (LME) was down 1.9% to $8,614.5 per metric ton.
China – a top metals consumer – hit back on Friday with additional 34% tariffs on all US goods from 10 April, after Donald Trump imposed a 34% tariff on most Chinese goods as part of his sweeping reciprocal tariff program.
A base metals trader said:
With China’s markets closed last Friday, which coincides with significant declines in LME base metals, we anticipated a sharp drop in China’s commodity prices today. Some even hit their lower limits as soon as trading began.
Another trader said:
The retaliatory tariff makes us worry about trade war, which will impede economic growth globally.
SHFE aluminium slid 4.5% to 19,515 yuan a ton, zinc lost 4.2% to 22,195 yuan, lead fell 2.4% to 16,810 yuan, while nickel was down 6.7% to 120,370 yuan, tin fell 6.5% to 273,680 yuan.
Among other metals, LME aluminium lost 0.3% to $2,372.5 a ton, lead fell 0.3% to $1,901, zinc slid 0.8% to $2,639, tin was down 2.2% at $34,615 and nickel was down 0.1% at $14,775 a ton.
South Korea’s finance minister has said the government will prepare support measures for sectors with urgent needs, ahead of Donald Trump’s 25% tariff coming into force this week.
Choi Sang-mok “emphasised the need to analyse the impact on the macroeconomy and prepare support measures for sectors with urgent needs”, the ministry said in a statement on Monday .
On 2 April, Trump introduced a blanket tariff on imports to the US and higher
tariffs against “worst offenders”, including a 25% duty on imports from South Korea, set to come into force on Wednesday.
Reuters also reports that South Korea’s exports to the US hit a record high of $127.8bn in 2024, with automobiles – the top-selling product – accounting for 27% of the total.
On Monday, Choi and other policymakers also reviewed a response strategy ahead of the trade minister, Cheong In-kyo, visiting the US, the finance ministry said.
Separately, South Korea’s financial regulator asked firms and state institutions on Monday to be prepared to provide liquidity support for exporting companies and their contractors hit by tariffs.
In Australia, more than $160bn has been wiped off the Australian share market this morning as fears of a full-blown trade war grip investors, reports Jonathan Barrett.
The benchmark S&P/ASX 200 sank more than 6% to trade below the 7200-point mark within 15 minutes after the market opened on Monday.
The Australian dollar, meanwhile, fell to its lowest level since Covid against the US dollar as global markets sell off against the prospects of a global recession.
One Australian dollar was buying just 60 US cents on Monday morning after falling to a low of 59.64, its lowest point since April 2020, reports Luca Ittimani. It was worth 64 US cents on Wednesday, hours before Donald Trump set markets reeling with his tariff announcement.
The Australian dollar also reached pandemic-era lows in Europe, with one dollar buying just 54.4 Euro cents or 46.2 British pence at its lowest point on Monday morning.
Donald Trump says foreign governments will have to pay “a lot of money” to lift the sweeping tariffs he has characterised as “medicine” and which have routed Asian share markets. Those are among the top lines are in our latest full report on the turmoil.
The Nikkei dropped as much as 8.8% to hit 30,792.74 for the first time since October 2023.
In South Korea, trading on the Kospi index was halted for five minutes at 9.12am as stocks plummeted.
The Taiwan stock exchange said early on Monday it would roll out more policies to stabilise markets if there were “irrational falls”.
See the full report here:
Hong Kong and Chinese stocks dive
Hong Kong stocks have plummeted more than 9% at open, while Singapore stocks dropped over 7%, according to reports.
Hong Kong and Chinese stocks dived on Monday as markets around the world crumbled in the face of the widening global trade war and fears it will unleash a deep recession, Reuters says.
Hong Kong’s Hang Seng index was down 8% in early trade. Shares in online giants Alibaba and Tencent were down more than 8%.
China’s CSI300 blue-chip index fell 4.5%.
China, which is now facing US tariffs of more than 50%, responded in kind on Friday by slapping extra levies on US imports.
Taiwan stocks plummeted almost 10% on Monday in their first trading since Donald Trump announced his new tariffs regime last week, with the head of the island’s stock exchange saying it would roll out more stabilisation policies if needed.
After opening on Monday following a two-day market holiday on Thursday and Friday, Taiwan’s benchmark index dropped to its lowest level in more than a year, Reuters reports.
Taiwan’s top financial regulator on Sunday announced it would impose temporary curbs lasting all this week on short-selling of shares to help deal with potential market turmoil from the tariffs.
Shares in chipmaker TSMC and electronics maker Foxconn both fell near 10%, triggering the 10% circuit breaker in the Taiwan market.
Speaking to reporters shortly after the market opened, Taiwan stock exchange chairman Sherman Lin said it would coordinate with the financial regulator to take further stabilisation steps if needed.
The stock exchange would maintain flexibility in stabilisation measures this week to handle volatility stemming from new U.S. import tariffs, Lin added.
He said it would be hard for Taiwan to escape the market impact of the tariffs, but called on investors to have confidence in Taiwanese companies and the government.
US Treasury yields fell on Monday and the two-year yield sank to a multi-year low as worries of a possible recession in the world’s largest economy grew and investors wagered that could see US rates cut as early as May.
The two-year US Treasury yield, which typically reflects near-term rate expectations, tumbled more than 20 basis points to its lowest level since September 2022 at 3.4350%, as investors ramped up bets of more aggressive Federal Reserve easing this year, Reuters reports.
The benchmark 10-year yield last stood at 3.9158%, languishing near Friday’s six-month low of 3.8600%.
Futures now point to nearly 120 basis points’ worth of Fed cuts by December and markets swung to imply a roughly 60% chance the US central bank could ease rates in May, as policymakers seek to shore up growth in the world’s largest economy on the back of President Donald Trump’s latest tariff salvo.
JPMorgan ratcheted up its odds for a U.S. and global recession to 60%, as mentioned, and brokerages elsewhere similarly raised their probability of a US recession as tariff distress threatens to sap business confidence and slow global growth.
Nikkei plunge nears 9% as Japanese bank stocks plummet
Japan’s Nikkei share average tumbled nearly 9% early on Monday, while an index of Japanese bank stocks plunged as much as 17%, as concerns over a tariff-induced global recession continue to rip through markets.
The Nikkei dropped as much as 8.8% to hit 30,792.74 for the first time since October 2023. The index was trading down 7.3% at 31,318.79, as of 0034 GMT, Reuters reports.
All 225 component stocks of the index were trading in the red.
The broader Topix sank 8% to 2,284.69.
A topix index of banking shares slumped as much as 17.3%, and was last down 13.2%.
The bank index has borne the brunt of the sell-off in Japanese equities, plunging as much as 30% over the past three sessions.
Nikkei plummets nearly 8%
The Nikkei 225 has now dived nearly 8% after the Wall Street meltdown over Donald Trump’s tariffs.
Japan’s benchmark stock index sank 7.8% to lows last seen in late 2023. South Korea lost 4.6%.
As reported earlier, Trump said of the falling markets that “medicine” could be necessary at times and he was not intentionally engineering a market selloff.
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” the US president told reporters aboard Air Force One.
The market carnage came as White House officials showed no sign of backing away from their sweeping tariff plans, Reuters reports, and China declared the markets had spoken on their retaliation through levies on US goods.
Trump said he would not do a deal with China until the US trade deficit was sorted out.
Almost $5tn was wiped off the value of global stock markets last week after Donald Trump launched his tariff offensive last Wednesday.
The US market was particularly hard hit. The benchmark S&P 500 lodged its biggest weekly drop since March 2020 and the Nasdaq Composite on Friday ended down more than 20% from its December record high, confirming the tech-heavy index is in a bear market.
The Dow Jones Industrial Average finished the week down well over 10% from its December record high, marking a correction for the blue-chip index.
Oil prices fell more than 3% on Monday – extending losses from the previous week – on growing concerns that a global trade war could slow the global economy and weaken oil demand.
Brent futures declined $2.1, or 3.2%, to $63.48 a barrel at 1027 GMT, while US West Texas Intermediate crude futures lost $2.14, or 3.5%, to $59.85, Reuters reports.
Both benchmarks plunged 7% on Friday to settle at their lowest in over three years as China ramped up tariffs on US goods in retaliation at Donald Trump’s tariffs, escalating a trade war that has led investors to price in a higher probability of recession.
Responding to Trump’s tariffs, China on Friday said it would impose additional levies of 34% on American goods, confirming investor fears that a full-blown global trade war is under way.
Investment bank JPMorgan said it now saw a 60% chance of a global economic recession by year-end, up from 40% previously.
Nikkei drops over 7%
Japan’s Nikkei index has plunged more than 7%, Agence France-Presse is reporting, after having it down 5% and, a little earlier, 3.6% following its opening today.
The fall extends last week’s 9% drop – its steepest one-week percentage decline since March 2020.
You have to ‘take medicine’ sometimes – Trump
Donald Trump has said about falling markets that “medicine” can be necessary at times, adding that he was not intentionally engineering a market selloff.
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” the US president told reporters aboard Air Force One on the economic fallout from his sweeping tariffs.
Welcome
Hello and welcome to our business blog covering the global fallout to the tariffs imposed by Donald Trump last week.
The US president’s decision to bring in levies of up to 50% on imports into the US rocked stock markets. As a new week dawns, traders, investors and consumers across the world are braced for further falls.
Stay with us to follow all the developments.
