Hang Seng Index Dips Amid Fresh Tariff Warnings; Nikkei Gains on Yen Weakness

US Markets: Nvidia Earnings Lifts Tech Stocks

US equity markets delivered mixed performances on Wednesday, February 26, as investors considered US President Trump’s latest tariff threats. Trump announced 25% tariffs on EU goods and confirmed that new tariffs on Canada and Mexico would become effective on April 2 instead of March 4.

The Nasdaq Composite Index and the S&P 500 gained 0.26% and 0.01%, respectively, ahead of Nvidia’s (NVDA) highly anticipated earnings results. In contrast, the Dow fell 0.43%.

After hours, Nvidia beat earnings expectations and delivered an upbeat outlook for the current quarter, boosting investor sentiment.

However, Trump’s latest tariff warning raised concerns about sweeping tariffs on autos, semiconductor chips, and pharmaceuticals, potentially impacting risk assets.

Hang Seng Index Dips Amid Tariffs Jitters

In Asia, the Hang Seng Index declined by 0.95% on Thursday morning as investors reacted to Trump’s tariff threats. Gains in the real estate sector failed to offset losses in tech stocks, pushing the index lower.

Trump’s threat of sweeping tariffs on semiconductor chips left the Hang Seng Technology Index down 2.26%. Tech giants Alibaba (9988) and Baidu (9888) fell 1.46% and 2.31%, respectively.

Meanwhile, the Hang Seng Mainland Properties Index extended its gains from Wednesday, rising 0.70%. Optimism surrounding Beijing’s plans to recapitalize banks and boost lending drove demand for real estate stocks.

Mainland China’s equity markets faced pressure due to ongoing tariff jitters. The CSI 300 and the Shanghai Composite Index declined by 0.51% and 0.64% in the morning session.

Nikkei Index Steadies on Yen Weakness

Japan’s Nikkei Index advanced by 0.15% on Thursday morning, supported by a weaker Yen and tech sector strength. The USD/JPY pair rose 0.14% to 149.292, recovering from the recent dip below 149. A softer Japanese Yen could improve earnings prospects for Japanese exporters, bolstering demand for Japanese stocks.

Nvidia’s upbeat earnings raised demand for Japanese tech stocks, with Tokyo Electron (8035) and Softbank Group (9984) up 0.81% and 0.43%, respectively. Meanwhile, Nissan Motor Corp. (7201) surged 4.81% amid speculation over a leadership change.

ASX 200 Recovers Amid Mining and Gold Gains

Australia’s ASX 200 Index reversed Wednesday’s loss, rising 0.27% on Thursday morning. Gold and mining stocks led the recovery.

Northern Star Resources Ltd (NST) rallied 2.25% after overnight gold price gains. Despite a 0.98% drop in iron ore spot prices, Fortescue Ltd. (FMG) and Rio Tinto Ltd. (RIO) rose 1.42% and 1.03%, respectively. Dip buyers returned after Wednesday’s heavy losses.

However, Qantas (QAN) stole the show, soaring 3.99% after reporting strong earnings and announcing its first dividend since the pandemic.

Outlook: Key Risks and Opportunities

Looking ahead, tariff developments, US inflation data, and central bank forward guidance will influence market sentiment.

Innovation and strategic AI partnerships present growth opportunities. However, escalating US-China tensions over AI could drive investors toward safe-haven assets. Meanwhile, continued uncertainty surrounding global trade policy could fuel further market volatility.

Rising tensions may send Hong Kong and Mainland China-listed stocks lower, while easing tensions could extend year-to-date gains.

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