Asian Shares Tumble On Tariff Worries

(RTTNews) - Asian stocks slumped on Monday as U.S. President Donald Trump Donald Trump followed through on his promise to impose tariffs on Canada, Mexico and China, and also threatened possible tariffs against the United Kingdom and the European Union, marking a significant trade escalation.

Canada and Mexico ordered retaliatory tariffs on American goods while China vowed countermeasures. The EU also warned of firm retaliation if targeted.

Investors fear that a trade war could hit the earnings of major companies and dent global growth.

The U.S. dollar rallied on risk-off sentiment, denting demand for bullion. Oil prices jumped, with WTI crude futures rising more than 2 percent on supply disruption fears.

Markets in mainland China remained closed for the Lunar New Year holiday. Hong Kong's Hang Seng index finished marginally lower at 20,217.26, ending off the day's lows as weak Chinese manufacturing data underlined the need for more government support measures to support the economy.

A private gauge of China's manufacturing activity expanded at a slower pace in January, while the official index tumbled into contraction to hit a five-month low, partly due to the approach of the public holidays.

Japanese markets slumped on concerns over the escalation of Trump's tariff measures.

The Nikkei average fell 2.66 percent to 38,520.09 while the broader Topix index settled 2.45 percent lower at 2,720.39. Automakers led losses, with Toyota Motor, Honda and Nissan plummeting 5-7 percent.

Seoul stocks lost ground as the won weakened to a three-week low on U.S. tariff concerns. The Kospi average dipped 2.52 percent to 2,453.95. Market heavyweight Samsung Electronics dropped 2.7 percent and its chipmaking rival SK Hynix gave up 4.2 percent.

LG Electronics, which has a production base in Mexico, plummeted 7.1 percent. Steelmaker POSCO Holdings fell 4.6 percent after reporting weakened earnings.

Australian markets declined on fears of a global trade war. The benchmark S&P/ASX 200 closed 1.79 percent lower at 8,379.40, marking its steepest one-day drop since Sept. 4. The broader All Ordinaries index fell 1.84 percent to 8,628.40, with banks and mining stocks pacing the declines.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index ended down 1.42 percent at 12,810.32.

U.S. stocks gave up early gains to end lower on Friday after the White House confirmed that tariffs of 25 percent on Canadian and Mexican imports and an additional 10 percent tax on Chinese goods would come into force on Tuesday - fueling concerns about higher inflation and elevated interest rates.

Trump also said he expects his administration to impose tariffs related to oil and gas around Feb. 18 without specifying any more details about the plan.

Upbeat earnings news from Apple and reports showing strong U.S. consumer spending and a moderate increase in inflation in December helped limit the overall downside to some extent.

The Dow shed 0.8 percent, the S&P 500 dipped half a percent and the tech-heavy Nasdaq Composite eased 0.3 percent.