In Singapore, Asian stocks showed a slight decrease at the end of the week due to escalating geopolitical concerns and worries about U.S. tariffs impacting the global economy. The demand for safe-haven assets like gold remained high as uncertainty in global economics and politics increased. Central banks worldwide, including the U.S. Federal Reserve, Bank Of Japan, and Bank of England, maintained their interest rates unchanged during the week, emphasizing the uncertain economic outlook resulting from rising trade tensions fueled by U.S. President Donald Trump's tariff intentions. Geopolitical tensions, such as Israeli airstrikes on Gaza and a Ukrainian drone attack on a Russian military airfield, further pushed investors towards safe assets.
Market strategist Charu Chanana from Saxo noted that with the possibility of near-term rate cuts being low, markets refocused on growth concerns and tariff risks, leading to increased volatility. Asian stocks, following Wall Street's cues, remained subdued, with the broadest index of Asia-Pacific shares outside Japan falling slightly while Japan's Nikkei saw a marginal increase driven by banking shares. U.S. stocks closed with slight losses, and futures for S&P 500 and Nasdaq ticked higher in Asian trading hours, with European futures mostly unchanged.
In China, stocks saw a slight decline in early trading, and Hong Kong's Hang Seng index dropped by 0.68% following a previous day's 1% decline as investors exercised caution after a surge in tech stocks and the index reaching a three-year high earlier in the week. Investors are closely watching the April 2 tariffs set by the U.S. administration, with concerns rising about the potential impact of reciprocal tariffs on inflation and economic growth. Aberdeen Investments' Ray Sharma-Ong highlighted the uncertainty surrounding the tariff sizes, which could lead to markets adjusting for further downside risks to growth.
The dollar received support amid escalating uncertainties and the Fed's reassurance that there was no urgency to decrease rates. The dollar index, measuring against a basket of major currencies, remained stable at 103.84 after rising by 0.36% the previous day. This followed the index's earlier fall to a five-month low as optimism for growth-friendly policies under Trump waned, replaced by fears that the global trade conflict initiated by Trump could trigger a U.S. recession.