Asian markets hit hard as US-China tariff standoff escalates

Analyst calls it one of the worst rout in years.

Asian financial markets endured a severe sell-off on 7 April, as the escalating trade war between the US and China triggered widespread panic, according to GlobalData.

The US administration’s sudden imposition of sweeping tariffs on Chinese imports, swiftly followed by retaliatory measures from Beijing, sent shockwaves through the region.

“Asian equities suffered their worst rout in years, plunging to multi-year lows in a day marked by panic and uncertainty," said Murthy Grandhi, company profiles analyst at GlobalData.

Japan’s Nikkei 225 and the broader Topix index plunged sharply, with all constituents in the red. This led to a brief halt in futures trading as circuit breakers were triggered, he noted.

Hong Kong’s Hang Seng suffered one of its steepest declines in recent years, whilst China’s CSI300 and Shanghai Composite also posted significant losses, driven by heavy sell-offs in major tech stocks like Alibaba and Tencent.

The market downturn spread quickly across the continent. South Korea’s Kospi, Singapore’s benchmark index, and Taiwan’s equity markets all saw steep declines. Malaysia and the Philippines joined the regional sell-off, adding to the widespread damage.  In India, the Sensex and Nifty 50 lost trillions in a single session, with all 30 Sensex stocks closing in the red.

While markets in Asia were rocked by the immediate impact, futures for US markets indicated further losses, following sharp declines in major indices on Friday. The S&P 500, Nasdaq, and Dow all shed nearly 6% during the last trading session.

"While China may remain an outlier in near-term negotiations, signs of constructive trade talks with other key economies could help restore investor confidence," said Grandhi.

"Historically, markets have shown a capacity to rebound strongly when geopolitical risks subside or when policy responses appear measured," he added. "As such, even modest diplomatic progress or tariff rollbacks could serve as catalysts for a broad-based recovery in global equities.”