Asia stocks rebound as US signals potential tariff negotiations

Investing.com-- Most Asian stocks rebounded on Wednesday amid hopes that U.S. President Donald Trump may negotiate the steep tariffs imposed on Mexico, Canada, and China, just a day earlier, while Australian shares declined despite data showing robust economic growth in the fourth quarter.

Regional equities also drew cues from a jump in U.S. stock index futures in Asia hours. Major U.S. stock indexes ended sharply lower on Tuesday after Trump’s announcement.

Asia stocks get respite from prospects tariff negotiations

On Tuesday, President Trump escalated trade tensions by imposing substantial tariffs on imports from Canada, Mexico, and China. 

A 25% tariff was levied on Canadian and Mexican goods, while tariffs on Chinese products were increased to 20%. 

These measures prompted swift retaliatory actions as Canada announced immediate 25% tariffs on U.S. imports worth C$30 billion, and China imposed 15% tariffs on U.S. agricultural imports, including chicken and wheat, along with 10% on products like soybeans and pork.

In an interview with Fox Business on Tuesday, U.S. Commerce Secretary Howard Lutnick indicated that President Trump might be open to negotiations to resolve the escalating trade disputes. 

This suggestion of potential dialogue introduced a degree of optimism in global markets.

Japan’s Nikkei 225 rose 0.5% on Wednesday, while TOPIX was largely unchanged.

Hong Kong’s Hang Seng index jumped 1.5%, rebounding from steep losses in the previous session.

Indonesia’s Jakarta Stock Exchange Composite Index jumped 2.9%, leading the gains among regional bourses. 

Singapore’s Straits Times Index gained 0.3%, while Malaysia’s KLCI index rose 0.6%.

South Korea’s KOSPI jumped 0.9%.

India’s Nifty 50 edged 0.2% higher at open on Wednesday.

Australia’s Q4 GDP grows more than expected

Data on Wednesday showed that Australia’s Gross Domestic Product (GDP) grew by 0.6% in the fourth quarter of 2024, surpassing the previous quarter’s 0.3% growth and exceeding market expectations of 0.5%. 

On an annual basis, GDP increased by 1.3%, up from 0.8% in the third quarter, driven by strong public and private investment, as well as a rebound in the terms of trade.

Despite the positive data, Australia’s S&P/ASX 200 index was trading 0.8% lower, as local investors were assessing the impact of tariffs on Australia’s biggest trade partner China.

China targets 5% GDP growth in 2025; parliamentary meeting in focus

China’s Shanghai Composite rose 0.3%, while the Shanghai Shenzhen CSI 300 index gained 0.4%. 

China has set a 2025 economic growth target of around 5%, media reports said, citing official documents. 

Premier Li Qiang will present it at the National People’s Congress, which began on March 5. 

Amid U.S. tariffs and trade tensions, China plans fiscal measures, including a higher budget deficit and 1.3 trillion yuan in special treasury bonds, reports stated.

China’s annual parliamentary meeting, also known as "Two Sessions", is being held from March 5 to March 11 this week in Beijing.