Equities resume selloff as global trade war intensifies
HONG KONG
Equities and oil plunged on Wednesday after Donald Trump ramped up his trade war.
After a brief respite on April 8 from the panic-selling at the start of the week, investors were once again scurrying for the hills amid fears that the U.S. president's hammer blow to global commerce will plunge the economy into a recession.
Forex traders were on edge. Beijing has allowed the yuan to weaken to a record low against the dollar, while the Indonesian rupiah was also at an all-time nadir. The South Korean won also hit its weakest since 2009 during the global financial crisis.
"Any illusion of calm in Asia just got nuked. Trump's latest tariff tantrum hits like a macro wrecking ball, torching what was left of risk appetite and plunging markets back into full-blown panic mode," said Stephen Innes at SPI Asset Management.
"The only question on every desk this morning is: Is he really willing to light a global recession match just to redraw the trade map?"
Jack Ablin of Cresset Capital estimated that the market now sees a greater than 50 percent chance of a U.S. recession.
The gains in Asia and Europe on April 8 came on optimism that the White House could be open to compromise.
But a lack of movement and Trump's confirmation of the 50 percent duties on China took the air out of investor sentiment.
Tokyo fell 5 percent as the safe-haven yen rose more than one percent, while Singapore fell more than 2 percent. Hong Kong, Sydney and Seoul were all off more than one percent.
Oil prices briefly tanked more than four percent, with both main contracts hitting their lowest levels since 2021 during COVID amid growing fears that the hit to economies will batter demand.
