The global financial markets are once again in turmoil as Asia-Pacific markets took a hit on Tuesday, following a trend of losses in the U.S. This downward spiral was triggered by concerns over tariff policies and the looming threat of a recession in the world’s largest economy.
In Japan, the Nikkei 225 index led the losses, plummeting by 2.32%, while the broader Topix index also fell by 2.44%. The telecommunications company Fujikura and heavy-equipment manufacturer IHI Corp were among the hardest hit, with losses of 6.98% and 6.71%, respectively. Adding to the gloom, Japan’s revised GDP for the fourth quarter came in at 2.2% on an annualized basis, below both economists’ expectations and the previous estimate of 2.8% growth.
Moving on to Hong Kong, the Hang Seng Index opened 1.57% lower, with major losses seen in Alibaba (down 4.98%), Sunny Optical Technology Group (down 3.99%), and Xiaomi Corp (down 3.78%). Meanwhile, Mainland China’s CSI 300 also started the day on a negative note, opening 0.98% lower.
South Korea’s Kospi index was trading 1.97% lower, while the small-cap Kosdaq witnessed a sharp decline of 1.92%. In Australia, the S&P/ASX 200 index fell by 1.48%, reversing the gains made in the previous session.
The negative sentiment in the Asia-Pacific region mirrored the situation in the U.S., where stocks tumbled amid fears that President Trump’s tariff policies could push the country into a recession. The S&P 500 shed 2.7%, the Nasdaq Composite saw a 4% decline (its worst session since September 2022), and the Dow Jones Industrial Average dropped by 2.08%.
The S&P 500 is now 8.7% below its all-time high on Feb. 19, while the Nasdaq Composite has fallen nearly 14% from its recent peak. A 10% decline is typically considered a correction on Wall Street. Despite the losses worsening throughout the day, the major averages managed to pull back from their session lows just before the closing bell.
In conclusion, the global financial markets are currently facing a period of uncertainty and volatility, driven by concerns over trade policies and the specter of a recession. Investors around the world are closely monitoring the situation, hoping for signs of stability and a potential turnaround in the near future.
