South Korean Stocks Lead Asia’s Gains as Trump Delays EU Tariffs; China, Hong Kong Struggle

South Korean stocks surged over 2% on Monday, outpacing other Asia-Pacific markets, following U.S. President Donald Trump’s decision to postpone a 50% tariff hike on European Union imports. The Kospi index hit its highest level since February, while Japan’s Nikkei and India’s benchmarks also ended higher. In contrast, China’s CSI 300 and Hong Kong’s Hang Seng Index dropped amid ongoing economic concerns and lack of new domestic stimulus measures.

The U.S. market remained closed for Memorial Day, but futures ticked higher in Asia after last week’s drop triggered by Trump’s earlier tariff threats on Apple and the EU. Wall Street’s key indexes had closed lower on Friday, with the S&P 500, Nasdaq, and Dow all slipping. Analysts now warn of growing uncertainty in global markets, emphasizing the need for diversified investments, especially in regions with solid earnings forecasts and realistic valuations.

Amid this cautious environment, Asia-focused funds are shifting away from China and favoring markets like India and Taiwan. HSBC analysts reported a $12 billion inflow into Asia excluding China this month, the highest in 18 months. India and Taiwan saw significant fund allocations, reflecting growing investor confidence in their growth prospects and more stable economic policies compared to China’s ongoing regulatory uncertainties.

Meanwhile, Chinese electric vehicle giant BYD saw its shares plunge over 9% after announcing widespread price cuts across 22 models, sparking fears of a price war. This pullback weighed heavily on the Hang Seng Tech Index, with companies like Meituan, Li Auto, and Xpeng also posting losses. Investors are awaiting further stimulus from Beijing to support the struggling consumer and tech sectors, both hit hard by weak demand and trade tensions.

Elsewhere in Asia, the weakening U.S. dollar helped lift regional currencies, with the South Korean won, Japanese yen, and Australian dollar all gaining. In Japan, Nippon Steel shares surged after Trump backed its $14.9 billion bid for U.S. Steel, framing it as a job-creating opportunity. In Australia, WiseTech Global jumped over 5% on news of a $2.1 billion acquisition of U.S. cloud firm E2Open, marking another major expansion for the logistics software provider.

Source: CNBC