Asian markets tumbled as Trump's fresh tariffs reignited trade war fears, sending crypto and equities into a tailspin. Oil prices spiked on supply concerns, while Japan's manufacturing sector continued its downward slide. Here's a look at the biggest market movers in this edition of World Street.
Asian markets down on trade war fears
Asian stock markets tumbled on February 3, with U.S. equity futures pointing sharply lower, as President Donald Trump's fresh tariffs on Canada, Mexico, and China stoked fears of a full-blown trade war and a hit to global growth.
Japan's Nikkei plunged as much as 2.3 percent in early trading, while Australia’s benchmark also dropped over 2 percent. Mainland Chinese markets remain closed until February 5 for Lunar New Year.
Trump imposed 25 percent tariffs on Canada and Mexico and a 10 percent levy on Chinese goods over the weekend, citing the need to curb illegal immigration and the drug trade—measures he had been threatening for weeks.
Canada fights back
Canada will challenge the U.S.'s 25 percent tariffs on its goods through international legal bodies, a senior official said on February 2, condemning the move as illegal and unjustified. The announcement follows Prime Minister Justin Trudeau's decision to impose retaliatory 25 percent tariffs on U.S. imports after President Donald Trump's tariff hike on February 1.
Starting February 4, Canada's countermeasures will hit 1,256 U.S. products—covering 17 percent of all imports from the U.S.—amounting to C$30 billion. Key targets include C$3.5 billion worth of cosmetics and body care, C$3.4 billion in household appliances, and C$3 billion in pulp and paper products.
Crypto down as trade war jitters risk assets
Cryptocurrency prices tumbled as mounting fears of a global trade war sent investors fleeing from risky assets. Bitcoin dropped over 4 percent early morning in Asia, hitting a three-week low near $96,606, while ether plunged 12 percent, returning to levels last seen in early November.
Oil spikes on tariff turmoil
Oil prices surged on February 3 after U.S. President Donald Trump's new tariffs on Canada, Mexico, and China fueled concerns over potential supply disruptions from key suppliers. However, expectations of weaker fuel demand kept gains in check.
U.S. West Texas Intermediate crude climbed $1.44, or 2 percent, to $73.97 a barrel, after briefly touching a one-week high of $75.18. Brent crude rose 62 cents, or 0.8 percent, to $76.29, after hitting $77.34 earlier in the session.
Japan's factories struggle as demand falters
Japan's manufacturing sector shrank at its fastest pace in 10 months as weak demand continued to weigh on activity, a private-sector survey showed on February 3. Business confidence also hit its lowest level in over two years, signalling mounting pressure on the sector.
The final au Jibun Bank Japan Manufacturing PMI dropped to 48.7 in January, down from 49.6 in December and slightly below the flash estimate of 48.8. With the index staying below the 50.0 mark for the seventh straight month, signs of persistent weakness remain.
China's factory growth slows
China's manufacturing activity lost steam in January, with job cuts accelerating at the fastest pace in nearly five years, a private survey showed. The Caixin/S&P Global manufacturing PMI dipped to 50.1 from 50.5 in December, hitting a four-month low and barely staying above the expansion threshold.
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