Asian stocks fluctuate as Trump’s tariff announcement nears

Asian markets edged up Wednesday as nervous investors brace for Donald Trump’s wave of tariffs later in the day, though speculation about what he has in store is stoking uncertainty on trading floors.

Indian stock market benchmark indices rebounded in early trade on Wednesday after a sharp decline in the previous session, driven by buying in blue-chip stocks such as HDFC Bank and ICICI Bank.

The 30-share BSE benchmark Sensex rebounded 256.82 points to 76,281.33 in early trade. The NSE Nifty climbed 84.9 points to 23,250.60.

From the Sensex pack, Tech Mahindra, Infosys, HDFC Bank, Maruti, ICICI Bank, Bharti Airtel, Zomato and Adani Ports were among the gainers.

Nestle, UltraTech Cement, Hindustan Unilever and Tata Motors were among the laggards.

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The BSE benchmark tanked 1,390.41 points or 1.80 per cent to settle at 76,024.51 on Tuesday. The Nifty dropped 353.65 points or 1.50 per cent to 23,165.70.

Equities have been battered leading up to the US president’s announcement – which he has dubbed “Liberation Day” – with warnings that friend and foe are in the crosshairs after what he says is years of “ripping off” the United States.

He has trailed the measures for weeks, initially suggesting they would match whatever levies other countries impose.

But US media reported he has also considered either blanket 20 percent levies or another plan where some countries get preferential treatment.

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Sweeping auto tariffs of 25 percent announced last week are also due to come into effect on Thursday.

The White House has said Trump will unveil his decision at 4pm in Washington (2000 GMT), after Wall Street markets close, with the Republican promising a new “golden age” of US industry.

However, officials admitted he was still ironing out the details late Tuesday.

Analysts said the ongoing uncertainty was spooking markets.

“Investors and company management dislike uncertainty, and the piecemeal, unreliable way in which tariff announcements are being delivered is creating plenty of it,” said Oliver Blackbourn and Adam Hetts at Janus Henderson Investments in a commentary.

“Estimates on what the average tariff rate will look like range from a few percentage points in moderate outcomes to double-digit levels in more forceful scenarios,” they added.

“What does seem less uncertain is that tariffs are, without much exception, likely to be bad for economic growth, consumers, and markets.”

Pepperstone Group’s Chris Weston said the suggestion that the tariffs would be effective immediately would provide some sort of certainty, even if it limited the scope for talks.

“This scenario – while hardly a positive for economics or earnings assumptions – would increase the conviction behind how we respond to the ‘facts’,” he explained.

“That said, life is never straightforward, and we will still need to consider the counter response from other countries.”

The planned duties have ramped up fears of a global trade war after several countries warned they were lining up their responses.

With that in mind, economists have warned that economic growth could take a hit and inflation reignite, dealing a blow to hopes that central banks would continue cutting interest rates.

In early trade, Asian markets mostly rose, though they were fluctuating between gains and losses after a recent selloff.

Hong Kong, Shanghai, Sydney, Wellington, Taipei and Manila were all up, Tokyo was flat and Singapore and Seoul slipped.

Safe haven gold held just below its record high $3,149.00 touched Tuesday.

And HSBC strategists led by Max Kettner warned Wednesday might not mark the end of the tariff uncertainty.

“We’d argue the potential is in fact higher for the 2 April deadline to introduce even more uncertainty – and hence prolonged broad-based weakness in leading indicators,” they said.

Chinese tech giant Xiaomi swung slightly higher in Hong Kong to claw back some of Tuesday’s fall of more than five percent that came after it confirmed one of its electric vehicles was involved in an accident in China that reportedly left three people dead.