Asia-Pacific markets fell on Monday as tensions between the United States and China escalated, prompting investors to reassess risk exposure.
China stated on Sunday that it “is not afraid of” a trade war with the United States, following President Donald Trump’s threat to impose punitive new tariffs on Chinese imports.
A spokesperson for China’s Ministry of Commerce accused the U.S. of a double standard after Trump announced additional 100% tariffs in response to Beijing’s new export controls on rare earth minerals.
Trump also posted on Truth Social: “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I,” Trump wrote. “The U.S.A. wants to help China, not hurt it.”
By 12 pm AEDT (1 am GMT), Australia’s S&P/ASX 200 had fallen 0.5%, while South Korea’s Kospi 200 shed 1.2%, retreating from Friday’s record close.
Japan’s Nikkei 225 remained closed for a public holiday.
In the United States on Friday, major benchmarks ended the session lower, with the Dow Jones Industrial Average down 1.9%, the S&P 500 falling 2.7%, and the Nasdaq Composite retreating 3.6%.
Commodity markets also reflected risk-off sentiment. Brent crude dropped 3.8% to US$62.73 per barrel, marking its lowest level since May 30, while spot gold rose 1% to settle at US$4,016.68 per ounce.
In China, the Shanghai Composite fell 0.9%, retreating from its highest close since 2008, while the CSI 300 slipped 2% to 4,616.8.
Hong Kong’s Hang Seng slipped 1.7% to 26,290.3, whereas India’s BSE Sensex added 0.4% to 82,500.8.
European markets also retreated sharply last week, with the FTSE 100 falling 0.9% to 9,427.5, the DAX dropping 1.5% to 24,241.5, and the CAC 40 closing 1.5% lower at 7,918.0.
