BENGALURU: Emerging Asian stock markets fell to their lowest level in two weeks on Tuesday, with benchmarks in Taiwan and South Korea slipping from record levels, as growing concerns about US-China trade relations soured risk sentiment.
MSCI’s index of Asian emerging market equities dropped 1.4 percent to its lowest level since September 30.
The index rose as much as 1 percent earlier in the session after US Treasury Secretary Scott Bessent said President Donald Trump was still expected to meet Chinese leader Xi Jinping later this month, following fresh tariff threats and export controls.
Most regional stock markets gave up early gains as sentiment soured after the world’s two largest economies began charging port fees on ocean shipping firms that move everything from holiday toys to crude oil.
Adding to the concerns, China announced sanctions against five US-linked subsidiaries of Hanwha Ocean, sending the South Korean shipbuilder’s shares down more than 5 percent.
South Korea’s KOSPI reversed course to fall 0.6 percent after touching a record high earlier in the session.
Taiwan’s benchmark index also fell 0.5 percent after rising to an all-time high early in the session.
“This morning’s rally fading into losses shows how cautious markets have become. Investors are quick to lock in profits on any strength as macro visibility remains low,” said Ernest Chew, Head of ASEAN Equities at BNP Paribas.
Chew expects markets to be more volatile in the near-term with sentiment swinging on headlines rather than fundamentals.
In Singapore, stocks fell 1 percent to a two-week low and the local currency edged down 0.3 percent. The Monetary Authority of Singapore kept its policy settings unchanged, as expected.
Preliminary government data showed Singapore’s economy grew 2.9 percent in the third quarter from a year earlier, better than the expected 1.9 percent.
“What is poignant is that this is not a dovish pause that is timing the next easing.
Rather, it is a comfortable hold, with scope to act further – but only if sufficiently warranted,” Vishnu Varathan, head of macro research for Asia excluding Japan at Mizuho Securities, said of Singapore’s policy decision in a note.
Other regional currencies also weakened, with the South Korean won depreciating 0.5 percent and the Thai baht falling 0.7 percent.