Financial markets across Asia and Europe recorded modest gains on Tuesday, reclaiming some ground after recent substantial losses. However, investor sentiment remains cautious as gold prices reached unprecedented heights ahead of President Donald Trump’s anticipated tariff announcements.
Traders worldwide are frantically adjusting their portfolios in preparation for what Trump has dubbed “Liberation Day” on Wednesday. The American president has promised to impose duties on “all countries” which he claims have been exploiting the United States economically for years.
Speaking yesterday, President Trump assured that his approach would be “very kind,” but the lack of specific details regarding which nations will face what penalties has created widespread uncertainty in global markets. This ambiguity has triggered significant equity selloffs and intensified concerns about a potential economic recession.
The situation worsened last week when Trump threatened to impose 25 percent tariffs specifically on automobile imports and parts, further dampening market sentiment. Financial analysts warn that market volatility will likely persist as governments either seek to appease the Republican administration or implement retaliatory measures.
In a preemptive response, Vietnam announced on Tuesday plans to reduce duties on various products including automobiles, liquefied gas, and selected agricultural goods.
“There are differing perspectives on Wall Street regarding tomorrow’s announcements,” explained financial expert Jose Torres of Interactive Brokers. “Some believe April 2nd may bring lighter tariffs than anticipated, potentially triggering a recovery in risk assets. Others express concern that our economy cannot withstand such significant pressure, pointing to households increasingly struggling to maintain spending patterns amid growing challenges.”
Following significant losses across multiple trading sessions, equity markets showed mild recovery signs on Tuesday. Tokyo’s market, which had suffered substantial declines due to heavy selling of automotive giants like Toyota and Honda, posted slight gains. Similar modest recoveries were observed in Hong Kong, Shanghai, Sydney, Seoul, Taipei, Bangkok, Singapore, and Wellington, while Mumbai experienced a slight decline.
European markets in London, Paris, and Frankfurt also opened higher, though analysts characterize the rebound as tentative, mirroring Monday’s performance in New York where the S&P 500 rose slightly but still recorded its worst quarterly performance since 2022.
With uncertainty dominating market sentiment, gold—traditionally considered a safe investment during turbulent periods—reached another record high of $3,149.00 per ounce. This surge coincided with Wall Street’s VIX “fear index” rising for the fourth consecutive day.
“We believe markets, including Asian foreign exchange, are underestimating these tariffs’ potential impact,” warned Michael Wan from MUFG. “We expect Trump to implement more aggressive measures than many consider possible, representing a significant structural shift in the post-World War II global economic order, beyond daily policy fluctuations and uncertainty.”
KEY MARKET INDICATORS
Tokyo – Nikkei 225: FLAT at 35,624.48 (close)
Hong Kong – Hang Seng Index: UP 0.6 percent at 23,266.32
Shanghai – Composite: UP 0.4 percent at 3,348.44 (close)
London – FTSE 100: UP 0.9 percent at 8,661.53
Euro/dollar: DOWN at $1.0810 from $1.0817 on Monday
Pound/dollar: UP at $1.2928 from $1.2916
Dollar/yen: UP at 149.99 yen from 149.94 yen
West Texas Intermediate: UP 0.3 percent at $71.72 per barrel
Brent North Sea Crude: UP 0.3 percent at $75.00 per barrel
New York – Dow: UP 1.0 percent at 42,001.76 (close)
