Asia-Pacific markets overnight

In the Asia-Pacific region, stock markets showed greater resilience, buoyed by bargain-hunting in the tech sector and growing optimism over potential policy support.

Japan’s Nikkei 225 climbed 0.7% to close at 37,053.10 on Friday, driven primarily by investors seizing opportunities in undervalued technology stocks. Additionally, Bank of Japan Governor Kazuo Ueda reaffirmed plans to reduce the central bank’s expanding balance sheet.

China’s Shanghai Composite Index rebounded from a two-day decline, rising 1.8% to 3,419.5, as investor sentiment improved amid expectations of increased economic support from Beijing.

Hong Kong’s Hang Seng Index also saw a strong performance, gaining 2.1% to close at approximately 23,960 on Friday.

Meanwhile, Australia’s S&P/ASX 200 index edged up 0.5% to 7,789.7 at market close, whereas South Korea’s Kospi index dipped 0.3% to 2,566.4.

Hewson noted that the Trump administration views tariffs on American brands like Harley-Davidson and Jack Daniel’s as unfair, and the former president appears willing to escalate the situation if his initial measures don’t have the desired effect.

This uncertainty has unsettled investors. “Nobody knows exactly where the red line is. The only certainty is that markets can shift dramatically in a single day,” Hewson added.

Kyle Chapman, a foreign exchange analyst at Ballinger Group, explained that market focus has been on the trade war rather than macroeconomic data. He noted that despite mild U.S. inflation figures failing to boost sentiment, investor confidence improved overnight due to the avoidance of a U.S. government shutdown.

Meanwhile, inflation reports from Germany, France, and Spain for February were published on Friday, alongside the UK’s January GDP report.

Britain’s FTSE 100 edged up by 0.2%, while Germany’s DAX and France’s CAC 40 both gained 0.5%. The broader STOXX 600 index also rose, increasing by 0.4%.

European Central Bank (ECB) President Christine Lagarde cautioned in a BBC interview this week that escalating trade tensions could have widespread economic repercussions.

"Any trade war negatively impacts the global economy. The initiator, the retaliator, and all subsequent actions will ultimately hinder overall growth. History shows that everyone suffers in a trade war—some countries more than others, some experiencing greater inflation—but ultimately, no one wins," Lagarde stated.

Danni Hewson, head of financial analysis at AJ Bell, remarked that European beverage producers are unlikely to welcome Trump’s latest tariff threats.

“European drink makers won’t be toasting Donald Trump after his warning of a 200% tariff on EU wine and spirits entering the U.S.,” she said.

European markets recover despite fresh tariff threats from Trump

European markets showed resilience on Friday morning, despite U.S. President Donald Trump threatening to impose 200% tariffs on alcoholic beverages imported from the EU. This move was in response to the EU’s decision to levy a 50% tariff on whiskey.

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Asia-Pacific markets overnight

European markets recover despite fresh tariff threats from Trump