Last Updated on March 13, 2025 by Misha Bhatia
From Nikkei to Hang Seng, Here’s What Led to the Market Decline
March 13, 2025: Despite overnight gains in the US stock market, Asian markets reversed early momentum and closed lower on Thursday. Concerns over US President Donald Trump’s tariff policies overshadowed optimism from lower-than-expected US inflation data, leading to a downturn across major Asian indices.
Also Read: SBI Predicts 75 Basis Points Rate Cut Amid Falling Inflation
📉 Global Market Performance:
- 🔻 Japan’s Nikkei 225: Reversed early gains, closing 0.08% lower at 36,790.03.
- 🔻 Shanghai Composite Index: Fell 0.4%.
- 🔻 Hong Kong’s Hang Seng Index: Dropped 0.58%.
- 🔻 Australia’s Benchmark Index: Declined by 0.5%, entering correction territory.
- 🔻 India’s Sensex & Nifty 50: Lost early gains, trading 0.2% lower.
📌 5 Reasons Behind the Market Decline:
Also Read: Gold Prices Hit Record High Amid US Inflation & Trade War Fears
1️⃣ Concerns Over Trump’s Tariff Policies
- The US imposed fresh tariffs on steel and aluminum imports from Brazil, South Korea, and the EU.
- In retaliation, Canada announced $21 billion in tariffs, and the EU plans to levy $28 billion in tariffs starting in April.
- Increased trade tensions led to uncertainty in global trade, affecting market sentiment.
2️⃣ Recession Fears Amid Trade Tensions
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- Goldman Sachs slashed its 2025 US GDP growth forecast to 1.7% (from 2.4%).
- Higher tariffs could push the US economy into recession, with ripple effects on Asian economies.
- Investors fear slower global economic growth, triggering sell-offs in stock markets.
3️⃣ Fed Rate Hike Concerns
- Trump’s trade policies + tax cuts = rising inflation.
- The US Federal Reserve might delay interest rate cuts or even raise rates to counter inflation.
- Higher interest rates = lower stock valuations, causing a negative impact on equities.
4️⃣ Stronger Yen Hurts Japanese Stocks
- Bank of Japan (BOJ) Governor Kazuo Ueda signaled a potential rate hike.
- This led to a stronger yen, making Japanese exports less competitive, dragging Nikkei 225 lower.
5️⃣ Flight to Safer Assets
- Uncertainty led investors to shift to US Treasury bonds.
- The 10-year US Treasury yield dropped 60 basis points since mid-January.
- Safe-haven assets like gold & bonds surged, pulling investments away from equities.
🌍 What’s Next?
🔹 Chinese government stimulus & tech advancements could provide support to Asian markets.
🔹 US Fed’s next policy meeting (March 18-19) will determine market direction.
🔹 Trade war negotiations between US, EU, and China will impact investor sentiment.
📢 “While trade wars will impact global economies, no one wants escalation. Efforts to ease tensions could help stabilize markets.” – Ross Maxwell, Global Strategy Lead, VT Markets.
Tags:
Asian stock markets, US tariffs impact, global market trends, Nikkei stock performance, Hang Seng today, US Fed rate hike, trade war impact, recession fears, stock market analysis
