Asian stocks decline at open as US pressures China
Asian stocks started on a risk-off mood Tuesday after US President Donald Trump’s move to curb Chinese investments and proceed with tariffs on Canada and Mexico prompted investors to trim positions. A decline in US stocks at the end of trading also hurt sentiment.
Shares in Australia and Japan opened lower while futures pointed to a 2% drop in Hong Kong. A gauge of Chinese shares in the US had its biggest drop in more than four months after Alibaba Group Holding Ltd.’s American depositary receipts closed down 10%, the biggest decline since October 2022. The yield on 10-year Treasuries slid 1 basis point to 4.4% in early Asian trading while gold touched a record Monday.
Sentiment in the broader market soured after Trump rolled out a memorandum telling a key government committee to curb Chinese spending on tech, energy and other strategic American sectors. That’s threatening to undo a rally in Chinese technology shares after optimism over DeepSeek and President Xi Jinping’s meeting with corporate leaders including Alibaba’s Jack Ma, had sent a key gauge to a three-year high.
“Trump’s directive to limit Chinese spending and investment in strategic US sectors has been the trigger for a solid reduction in extended longs and this will spill over in the HK equity cash open,” Chris Weston, head of research at Pepperstone Group Ltd., wrote in a note. “The key aspect will then be how China/Asia-based traders act after the initial weakness.”
A slide in most megacaps hit the final stretch of US trading as the S&P 500
