Asian Markets Slide as U.S. Recession Fears and Tariff Uncertainty Weigh on Tech Sector

Asian stock markets tumbled on Tuesday, led by sharp declines in the technology sector, as investors reacted to Wall Street’s overnight sell-off amid mounting recession fears in the U.S. These fears are fueled by uncertainty surrounding President Donald Trump’s trade policies and the chaotic rollout of his tariffs.

Major U.S. indexes fell on Monday, with the tech-heavy NASDAQ Composite plunging 4%, which added to concerns about slowing growth in the U.S., Mexico, and Canada. A Reuters poll indicated that economic risks are rising across these nations as businesses and policymakers grapple with the impact of Trump’s tariff implementation. Inflation pressures in the U.S. have also intensified, making it more likely that the Federal Reserve will delay any policy adjustments, while recession fears continue to grow.

In Asia, Japan’s Nikkei 225 dropped 1.4% to its lowest level since mid-September 2024, and TOPIX declined 2%. SoftBank Group shares fell 4%, Tokyo Electron lost 2.2%, and Panasonic slid 4.1%. In South Korea, the KOSPI dropped 1.2%, with tech giants Samsung Electronics and SK Hynix Inc losing 0.5% and 2.2%, respectively. Meanwhile, China’s Shanghai Composite fell 0.7%, and the Shanghai Shenzhen CSI 300 index slipped 0.8%, while Hong Kong’s Hang Seng traded 1% lower and Alibaba’s shares fell 1.3%. Other Asian markets showed mixed performance, with Nifty 50 futures largely muted, Australia’s S&P/ASX 200 losing 0.8%, the Philippines’ PSEi Composite slumping 2%, and Singapore’s Straits Times Index dropping 1.7%.

On the economic front, Japan’s fourth-quarter 2024 GDP growth was revised downward to an annualized 2.2% from 2.8%, primarily due to weaker consumption. Despite the revision, expectations remain that the Bank of Japan will proceed with interest rate hikes given persistent inflation and some underlying resilience in the economy. In Australia, consumer sentiment surged to a three-year high in March, with the Westpac-Melbourne Institute Index rising 4% to 95.9, attributed to a recent interest rate cut by the Reserve Bank of Australia and easing inflation pressures.

Overall, the declines in Asian markets reflect broad concerns over a potential U.S. recession exacerbated by Trump’s unpredictable trade policy measures, particularly his tariffs, and highlight the sensitivity of tech stocks and economic sentiment to geopolitical and policy developments.