Asian Markets Hit by Tariff Jitters as Trump Set to Announce New Policies

China and Hong Kong stocks experienced significant declines amidst fears of upcoming tariff announcements by U.S. President Donald Trump. With markets anticipating reciprocal tariffs, regional indices faced a downturn, affecting major companies like Alibaba and Xiaomi. Meanwhile, China's manufacturing showed growth, highlighting a complex economic landscape.

On Monday, stocks in China and Hong Kong plummeted, joining a widespread decline in regional equities as investors braced for U.S. President Donald Trump's impending tariff announcement set for April 2.

China's main indices, the CSI300 and the Shanghai Composite, dropped by 1% by midday, reaching their lowest levels in nearly a month. In Hong Kong, the Hang Seng Index fell 1.73% to its lowest point since March 4, while the Hang Seng Tech Index saw a significant decline of over 3%, hitting a one-and-a-half-month low. Major stocks such as Alibaba and Xiaomi faced considerable losses of 3.6% and 4.8% respectively. CK Hutchison dipped by as much as 4.7% due to a potential delay in a port deal signing.

Region-wide, markets remained under pressure with the MSCI's Asia ex-Japan stock index down 1.84% and Japan's Nikkei falling 4.08%. Despite these dips, the Hang Seng Index gained nearly 15% this quarter, driven by optimism in AI growth and strong mainland inflows. Meanwhile, China's manufacturing expanded at its fastest pace in a year, offering some economic relief amidst escalating U.S.-China trade tensions.