Asian stock markets began Wednesday’s session with a cautious and mixed tone, as investors held back from making risky bets after US President Donald Trump ruled out extending his August deadline for imposing steep tariffs.
The renewed hardline stance sent copper futures falling and injected fresh uncertainty into global markets, pointing to a muted start for Indian benchmarks like the Sensex.
President Trump signaled a renewed determination to push ahead with his aggressive plans to heavily tax foreign imports.
He stressed to reporters that he would not offer additional extensions on the country-specific levies, which are now set to take effect in early August.
Furthermore, he indicated he could announce substantial new tariffs on imports of copper and pharmaceuticals, a move that is likely to spark further upheaval in global metal markets.
Benchmark copper futures fell in London following Trump’s remarks, even as US copper prices had seen a record gain in the last session on the same news.
This latest posturing on social media and at a Cabinet meeting on Tuesday came after traders had initially shrugged off a series of letters and executive actions issued by Trump on Monday.
Those actions had pushed back the deadline for his so-called “reciprocal” tariffs while simultaneously announcing the latest rates for more than a dozen countries that had not managed to broker quick trade agreements.
President Trump also told reporters that despite making progress with the European Union on a trade deal, his frustration over the bloc’s taxes and fines targeting US technology firms could lead him to unilaterally declare a new tariff rate within the next two days.
Despite this aggressive rhetoric, some market analysts believe a degree of indifference has set in.
“The market’s response to this week’s barrage of tariff headlines has been one of indifference, having absorbed the lessons of Liberation Day, where timelines were extended, levy rates were reduced, and trade deals were brokered,” Tony Sycamore, a market analyst at IG Australia, told Bloomberg.
“This indifference is expected to continue until either the hard economic data starts to turn lower or inflation spikes higher.”
Others see the risk as more significant.
“While tariffs will likely remain high — compared with levels at the start of the year — as will the headline risk, we think the US effective tariff rate should end the year at around 15%,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.
A mixed picture across Asian bourses
The market’s reaction to these developments was varied across the region. Chinese and Hong Kong-listed stocks started the day lower.
As of 9:40 a.m. local time, Hong Kong’s Hang Seng Index had fallen 0.83%, while the mainland’s CSI 300 index was flat.
This came as China’s producer price index plunged 3.6% in June from a year earlier, its largest decline in nearly two years.
Meanwhile, its consumer price index edged up a slight 0.1% in June from a year ago.
Elsewhere, Japan’s Nikkei 225 benchmark had fallen 0.15%, while the broader Topix index managed to tick up 0.19%. In South Korea, the Kospi index added 0.43%, and the small-cap Kosdaq moved up 0.44%.
Over in Australia, the S&P/ASX 200 benchmark fell 0.43%. Overall, a broader gauge of Asian shares dipped 0.1%.
Indian markets poised for muted opening
Indian benchmark indices are likely to open on a subdued note on Wednesday, amid rising confusion over the US-India trade deal as the initial deadline of July 9 arrives today.
Traders will also be keenly looking ahead to the start of India Inc’s Q1 earnings season, which kicks off on Thursday, and any further cues on potential US rate cuts.
Nifty futures on the NSE International Exchange were trading 25.40 points, or 0.10 percent, lower at 25,586.50, hinting at a negative start for the domestic market.
Despite the near-term caution, some analysts believe the market’s underlying tone remains positive.
“Overall, markets are expected to remain optimistic in the near term, supported by hopes of a trade breakthrough and the upcoming earnings season,” said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.
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