Asian stock markets plunged on February 28, reflecting Wall Street’s steep declines amid escalating trade tensions after President Trump’s tariff threats against China, Canada, and Mexico. The semiconductor sector suffered significantly due to Nvidia’s poor quarterly results, impacting tech stocks across the region. Bitcoin also experienced a sharp drop, falling below $80,000, while concerns over global crude oil demand led to declines in oil prices. Economic slowdown fears could affect export-driven Asian economies.
Asian Stock Markets Experience Significant Decline
On Friday, February 28, Asian stock markets took a nosedive, mirroring the sharp declines seen on Wall Street. The downward trend was primarily driven by escalating trade tensions, as President Donald Trump threatened additional tariffs against China, Canada, and Mexico. The semiconductor sector was particularly hard hit, following disappointing news from American tech giant Nvidia.
Bitcoin and Semiconductor Stocks Suffer Heavy Losses
Bitcoin, known for its volatility, also faced a steep decline, falling 25% from its recent all-time high just six weeks earlier. The cryptocurrency dropped below the $80,000 threshold for the first time since November 11, reflecting growing uncertainty in the market.
In the wake of Wall Street’s tumultuous Thursday, Asian markets were hit hard. The New York Stock Exchange closed significantly lower, impacted by a drop in technology stocks and ongoing concerns over U.S. trade policies. President Trump announced an impending 10% tariff on Chinese goods starting March 4, with additional tariffs for Canada and Mexico taking effect the same day.
At the Tokyo Stock Exchange, the Nikkei index fell by 3.49% to 36,920 points, while the broader Topix index saw a decrease of 2.28%. Meanwhile, the Kospi index in Seoul dropped by 3.12%, and the Sydney Stock Exchange retreated by 1.13%. Chinese markets, which had previously shown signs of recovery, also faced losses with the Hang Seng index in Hong Kong plunging 2.20% and the Shanghai composite index down by 0.82%.
Michael Wan from MUFG Bank warns that sustained tariffs could lead to significant economic slowdowns in the U.S. and China, with ripple effects on Mexico and Canada, ultimately impacting export-driven Asian economies. He highlights that the uncertainty surrounding import substitutes could destabilize supply chains throughout Asia.
The Japanese yen gained 0.18%, trading at 149.55 yen per dollar, fueled by expectations of a potential interest rate hike from the Bank of Japan in the spring. However, this increased pressure on the stocks of Japanese exporters.
In addition to trade concerns, the semiconductor sector faced a downturn due to Nvidia’s disappointing quarterly results, which resulted in a nearly 9% drop in its stock. This decline negatively influenced other tech stocks, including those in the Japanese market. Notable decreases included Advantest, which plummeted 9.66%, and Disco Corp, down 10.71%.
In Seoul, major players like Samsung Electronics and SK Hynix also experienced losses, falling by 2.31% and 4.77%, respectively.
As for Bitcoin, it has seen a significant decline, dropping to below $80,000. The cryptocurrency’s value has plummeted over 25% since reaching its peak of approximately $109,000 on January 20. The fear of escalating trade wars has led many investors to pull back from speculative assets. Stefan von Haenisch from Bitgo noted that the current macroeconomic conditions make the downturn unsurprising, especially with investors awaiting tangible support for crypto-assets from the Trump administration.
The oil market has not been immune to these economic fears, with concerns regarding global demand for crude oil. As of 03:30 GMT, the American WTI barrel was down 0.45% to $70.03, while the North Sea Brent barrel fell by 0.47% to $73.69.