Kathmandu. Asian markets were in turmoil on Monday as the tariffs announced by US President Donald Trump took effect.
At the beginning of the first trading day of the week, Hong Kong’s Hang Seng and Japan’s Nikkei fell by 9.24 percent and 8.50 percent, respectively. On the other hand, Singapore’s market fell by 7 percent, China’s market by 5.5 percent, and Malaysia’s market by 4.2 percent. Along with this, the Australian stock market and New Zealand’s stock market fell by 4.1 percent and 3.6 percent, respectively. India’s Sensex fell by 3,900 points in early trading, while the Nifty also fell by 1,000 points. Meanwhile, the BSE Midcap and Smallcap indices have fallen by up to 10 percent.
Trump’s tariffs are the main reason for the decline in Asian stock markets. The possibility of a trade war between the US and China due to tariffs has also increased fears of a recession.
The 4 possible effects of tariffs have affected Asian as well as global markets.
These are the 4 reasons
Trump’s reaction to tariffs Statement
Trump is unlikely to back down from the tariffs. He has called them a drug that is hurting America. “I don’t want anything bad to happen, so sometimes you have to take a drug to make something right,” he said. In addition, Trump has made it clear that he is not at all worried about the losses in the global stock market.
Rising risk of recession
Trump has maintained his strong stance on taxes imposed on all countries of the world. Due to which, fear has increased in the stock market. Brokerage firm MK Global said the growing risk of a recession in the US could have global repercussions.
##Inflation risk
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Trump tariffs will accelerate inflation, reduce corporate profits and affect consumer sentiment, which will directly affect economic growth, experts said in a report. In fact, China’s retaliatory tariffs and additional taxes on US goods have raised concerns that a major trade war will seriously damage the global economy. According to Reuters, JP Morgan has now raised the probability of a global recession to 60 percent from a forecast of 40 percent.
FPI apathy continues
Another reason for the decline in the Indian stock market is the apathy of foreign investors. Foreign portfolio investors, or FPIs, have once again started withdrawing money from the Indian stock market and its impact is clearly visible in the index. Trump tariffs have intensified this. FPIs sold shares worth Rs 13,730 crore till Friday, the last trading day of last week.
