Dhaka: Asian equities saw significant gains on Thursday as investors chose to overlook the potential implications of former US President Donald Trump’s threat to impose a 100 percent tariff on semiconductors. The market optimism was further buoyed by hopes that the Federal Reserve might lower interest rates in the forthcoming month.
According to Bangladesh Sangbad Sangstha, despite the looming tariffs that were set to take effect on a wide range of countries, Trump announced an additional 100 percent tariff on chips and semiconductors without specifying a timeline. Notably, he reassured companies like Apple that those manufacturing within the United States would not be affected by these tariffs.
Taiwan Semiconductor Manufacturing Company (TSMC) led the stock gains, surging almost five percent. Taiwan’s National Development Council chief, Liu Chin-ching, confirmed that TSMC, being a major exporter with factories in the US, would be exempt from these tariffs. TSMC has committed to investing up to $165 billion in the US, marking the largest single foreign direct investment in the country’s history.
In South Korea, Samsung saw an increase of over two percent, while SK hynix rose more than one percent. These gains were supported by Apple’s announcement of an additional $100 billion investment in the US, raising its total pledge to $600 billion over the next four years.
Conversely, some Japanese companies faced challenges. Tokyo Electron, a producer of chipmaking equipment, saw its shares drop over two percent, while chipmaker Renesas and precision tools maker Disco Corporation also experienced declines. On the other hand, Sony’s shares soared by 4.1 percent, driven by strong performance in its gaming business and a lesser-than-expected impact from US trade tariffs.
Analysts suggest that although the 100 percent tariff threat appears steep, there is optimism that the actual tariff level may not reach that high. The expectation is that Trump’s strategy of proposing high tariffs to negotiate down might result in more manageable levels, especially to curb inflation in consumer goods.
Trump’s broad “reciprocal” tariffs went into effect on Thursday against several trading partners, following an increase in tariffs on India and Brazilian goods earlier in the week. Asian markets continued their upward trajectory, fueled by positive performances on Wall Street, particularly in tech giants like Apple and Amazon.
Across Asia, markets including Tokyo, Hong Kong, Singapore, and others ended in positive territory. Shanghai saw gains following data indicating a rise in Chinese exports, which helped counter a decline in shipments to the US. Meanwhile, some markets like Mumbai, Sydney, and Manila faced declines.
Investors remain optimistic about potential Federal Reserve rate cuts, influenced by weak US job creation data over recent months. Additionally, oil prices rose amidst Trump’s threats of penalties on countries importing Russian oil and ongoing developments in the Russia-Ukraine conflict.
Key market figures included Tokyo’s Nikkei 225 up 0.7 percent, Hong Kong’s Hang Seng Index up 0.8 percent, and Shanghai’s Composite up 0.2 percent, reflecting the positive market sentiment across the region.