Asian shares slid on Monday as U.S. curbs on China investments and a fading euro gain weighed on sentiment. President Donald Trump’s tariffs and restrictions on China hurt stocks across the region. Japan’s Nikkei 225 fell 1.3% while shares of Japanese trading houses rose.
The DAX index in Frankfurt showed modest gains as traders watched developments closely. The U.S. revealed moves to limit investments into Chinese tech companies ahead of Nvidia’s earnings report this week. This put traders on edge and sparked broad declines for chipmaker shares.
Nvidia Corp. dropped in early trading, along with ASML Holding NV and STMicroelectronics NV. Trump officials recently met with Japanese and Dutch counterparts about restricting Tokyo Electron Ltd.
and ASML Holding NV engineers from maintaining semiconductor gear in China. This comes after a directive to use the Committee on Foreign Investment in the U.S. more aggressively to thwart Chinese investment. Uncertainty over how the new U.S. administration’s policies will affect global growth has prompted investors to pare risk.
Asian stocks face U.S. investment curbs
They are switching to havens like Treasuries or gold. The VIX Index, a measure of volatility, touched its highest level this year at just below 20.
“At the moment, there’s a lot of uncertainty reigning in the background which is making it challenging for investors to navigate,” said Alexandra Morris, an investment director at Skagen AS. “The whole tariff discussion is the main negative catalyst.”
Bonds surged, pushing the yield on 10-year Treasuries down six basis points to 4.34%. Bitcoin tumbled below $90,000 to hit the lowest since mid-November.
A gauge of the attractiveness of German debt fell to the most negative on record, reflecting expectations for higher borrowing. In currency trading, the euro steadied following the recent German election results. The U.S. dollar rebounded from recent lows.
Gold pulled back from its record high. U.S. investor Carson Block announced considerations for an India fund with potential ‘long-only’ or ‘long-short’ strategies. However, he ruled out activist short-selling in the country.
Key events this week include U.S. consumer confidence data, Fed speeches, Apple’s shareholder meeting, Nvidia earnings, and economic reports from the U.S., Eurozone and Japan. Traders will be watching these developments closely as they navigate the uncertain market landscape.
