Asian stock markets fell on Tuesday, bucking the rally in US equities, as regional indices reacted to mixed economic data and geopolitical concerns.
Market performance overview
Japan’s Nikkei 225 dropped 1.46%, while the Topix slid 1.3%.
The country’s services producer price index (PPI) rose 2.9% year-on-year in October, slightly above September’s 2.8%, indicating sustained inflationary pressure in the business services sector.
South Korea’s Kospi declined by 0.55%, and the Kosdaq lost 0.45%, reflecting broader regional weakness.
The S&P/ASX 200 edged down 0.39% in Australia after reaching a record high in the previous session.
Meanwhile, Hong Kong’s Hang Seng Index hovered near the flatline, and China’s CSI 300 slipped 0.34%, with subdued trading sentiment prevailing.
Investors in the region are awaiting Singapore’s October manufacturing output figures, which are expected to show a 2.2% year-on-year increase, down sharply from a 9.8% surge in September.
Analysts attribute the slowdown to weaker global demand and a contraction in electronics production.
Wall Street surge highlights divergence
On Wall Street, optimism drove key indices to fresh records.
The Dow Jones Industrial Average soared 440.06 points (0.99%) to close at 44,736.57, while the S&P 500 gained 0.3%, finishing at 5,987.37.
The Nasdaq Composite inched up 0.27% to 19,054.84.
Small-cap stocks outperformed significantly, with the Russell 2000 jumping 2% to reach a new all-time high.
This surge came as U.S. President-elect Donald Trump announced his nominee for Treasury secretary and proposed sweeping tariff measures.
On Monday, Trump’s social media posts revealed plans for a 25% tariff on goods from Canada and Mexico, alongside an additional 10% tariff on Chinese imports.
The announcement sparked uncertainty in global markets, with traders bracing for potential retaliatory measures.
Currency market movement
The US dollar strengthened amid heightened tariff rhetoric.
The dollar rose 1.6% to 20.6000 Mexican pesos and climbed 1% to C$1.4132.
Compared to the offshore yuan, the dollar appreciated 0.2% to 7.2628 yuan, briefly hitting a four-month high at 7.2730 yuan.
The yuan’s depreciation reflects market concerns over the impact of potential US tariffs on China’s export-driven economy.
The onshore yuan also weakened during early trading hours.
Asia-Pacific markets face near-term headwinds as geopolitical risks and uneven economic recovery weigh on sentiment.
Investors are closely monitoring developments in the US-China trade relationship and upcoming economic indicators for clarity on market direction.
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