US stock futures market is in green and so are the Asian markets. On Wednesday, the market sentiments seem to have improved with Nikkei 225, Hang Seng, Shanghai, Sensex, Singapore trading in positive territory. But, what has led to markets trading in green despite the imposition of tariffs by the US on Mexico, Canada and China, signaling a trade war between countries.
The announcement from US Commerce Secretary Howard Lutnick is what the markets are excited about. Commerce Secretary Howard indicated that a potential compromise on tariffs between the US, Canada, and Mexico could be in the works.
The comments come after Trump’s 25% tariffs on goods from Canada and Mexico, along with a 20% duty on Chinese imports, took effect on Tuesday. These measures prompted retaliatory actions from the affected countries, raising concerns about an escalating global trade war that could impede economic growth.
Equities in India rose 875 points, or 1.2%, to 73,862 on Wednesday, reversing losses from the previous three sessions, boosted primarily by the tech sector, auto, PSU banks, and metals. Traders took profits after the index fell to its lowest level since mid-May 2024, the day before.
Hong Kong stocks rose on Wednesday, rebounding after a slight drop the previous day. Following overnight declines in Wall Street’s S&P 500 and Dow Jones, a rebound in US futures added to the positive mood.
Investors also reacted positively to a copy of China’s work report, which set a 5% GDP growth target for 2025 and outlined economic stimulus measures amid an escalating trade war with the United States.
On the inflation front, the document revealed that Beijing reduced its yearly target to under 2% for the first time in more than two decades. Traders praised private survey data showing an unexpected rebound in services activity from January’s four-month low, driven by increases in new orders and overseas sales, as well as job stability.
Japan’s 10-year government bond yield reached 1.43%, reaching 15-year highs, following hawkish comments from Bank of Japan Deputy Governor Shinichi Uchida, who warned further interest rate hikes if economic forecasts were met.
The 10-year Treasury note’s yield remained steady at 4.24%, largely due to Germany’s agreement to revise borrowing rules and establish a new infrastructure fund, which is expected to boost European economic growth. However, US Treasury yields remain near multi-month lows due to new tariffs on Canada, Mexico, and China, causing retaliatory actions and raising concerns about potential economic repercussions for the US.
Gold Price
Gold stayed around $2,910 per ounce on Wednesday, maintaining recent gains and trading near record highs, buoyed by safe-haven demand amid the installation of US tariffs.
Trump’s 25% tariffs on Mexican and Canadian imports went into force Tuesday, along with a 20% increase in Chinese tariffs, intensifying trade tensions and provoking retaliation. The US stopped military supplies to Ukraine amid news of probable sanctions relaxation for Russia, adding to gold’s attractiveness as a safety asset. The gold rate today in India is Rs 86,090.