Asian stocks experienced significant declines on Friday as President Trump's new tariff measures on imports from 60 trading partners took effect, with Japan's Nikkei 225 slumping 3.2% and South Korea's KOSPI tumbling 5.8%, according to Investing.com. The decline was triggered by the US announcement of import tariffs ranging from 10% to 12.5% on goods from major trading partners, with Japan, South Korea and Taiwan among the markets facing these effective tariff rates under Washington's new regime. This development increased concerns about the impact on Asia's export-driven economies, with the latest measures replacing temporary 10% levies that had expired overnight.
Chinese stocks experienced significant declines on Friday due to escalating trade tensions, with the Shanghai Composite falling 1.33% and the Shenzhen Component dropping 0.49% according to reports from Business Standard. The decline was triggered by the US announcement of import tariffs ranging from 10% to 12.5% on goods from major trading partners, with Chinese exports specifically facing a 12.5% tariff rate. However, despite Friday's decline, China's CSI300 remained on track to snap a four-week losing streak, rising about 3.2% for the week as investors positioned for next week's Politburo meeting, where policymakers are expected to unveil additional measures to support growth following weaker second-quarter economic data.
Technology and semiconductor stocks emerged as the biggest losers during Friday's trading session, as reported by Business Standard. Investors expressed particular concern about the upcoming IPO of CXMT, which they feared could absorb a large amount of market liquidity, putting additional pressure on the technology sector. Specific companies that ended lower included Cambricon Technologies, SMIC, Zhongji Innolight, Eoptolink Technology, and Victory Giant Technology. The technology sector's decline reflects broader market anxiety about the potential impact of reduced liquidity on the sector's performance, with South Korea's heavyweight chipmakers also tracking weakness in U.S. peers after investors reacted cautiously to this week's technology earnings.
Despite Friday's decline, Chinese equities managed to post gains for the entire week, according to Business Standard reports. The Shanghai Composite advanced 1.33% over the week, while the Shenzhen Component finished 0.49% higher, supported by earlier gains throughout the week. This weekly performance demonstrates the resilience of Chinese markets despite the tariff-related volatility experienced on Friday, suggesting that investors maintained a positive outlook on Chinese equities overall. The CSI300's 3.2% weekly gain came even as it faced tariff pressures, with state-backed buying helping underpin mainland equities in recent weeks.
Looking ahead to next week, investors will monitor China's July manufacturing PMI for fresh clues on factory activity ahead of the Politburo meeting, where policymakers are expected to unveil additional measures to support growth. As per DBS economist Samuel Tse, markets will be looking for stronger policy support for employment and household consumption at next week's Politburo meeting, alongside further details on China's long-term consumption strategy under the 15th Five-Year Plan. The Monetary Authority of Singapore will kick off a busy week for regional central banks on Monday, with attention shifting to next week's second-quarter inflation report and comments from Reserve Bank of Australia Governor Michele Bullock, which could offer fresh clues on the policy outlook.
