Asian stocks declined on Tuesday as fresh U.S. trade measures against China and President Donald Trumps comments that tariffs on Canada and Mexico will go forward rekindled fears of a global trade war.
The dollar strengthened on risk-off sentiment, pushing gold prices lower from record highs. Oil extended gains amid fresh sanctions on Iran and a commitment to compensate for overproduction by Iraq.
Chinas Shanghai Composite index dipped 0.80 percent to 3,346.04 as the optimism about Chinas tech sector cooled off and trade war fears resurfaced.
Hong Kongs Hang Seng index tumbled 1.32 percent to 23,034.02 after the Donald Trump administration targeted China with new trade and investment restrictions, further straining relations between the two economic giants.
Alibaba Group Holding shares tumbled 3.8 percent after the companys American depositary receipts fell 10 percent, the biggest decline since October 2022.
Japanese markets fell sharply even as shares of trading houses jumped after Warren Buffett said Berkshire Hathaways stakes in them would likely increase somewhat over time.
The Nikkei average fell 1.39 percent to 38,237.79 as a result of rising trade tensions. The broader Topix index settled 0.43 percent lower at 2,724.70. Mitsubishi Corp surged 8.8 percent, Marubeni climbed 7.5 percent and Itochu rallied 6.7 percent.
Seoul stocks ended lower as the countrys central bank cut interest rates by 25 basis points to 2.75 percent and lowered its GDP forecast for this year to 1.5 percent, down from 1.9 percent in the November forecast amid ongoing political uncertainty surrounding President Yoon Suk Yeols impeachment trial. The Kospi average dropped 0.57 percent to 2,630.29.
Australian markets ended notably lower after major companies such as Dominos Pizza Enterprises and Johns Lyng Group reported lackluster financial outcomes.
The benchmark S&P/ASX 200 dipped 0.68 percent to 8,251.20 while the broader All Ordinaries index closed 0.73 percent lower at 8,498.
Zip Co shares soared 13.9 percent after the buy-now-pay-later firm reported strong half-year results and reaffirmed its FY guidance.
Across the Tasman, New Zealands benchmark S&P/NZX-50 index plummeted 1.79 percent to 12,307.27.
U.S. stocks fluctuated before ending mixed overnight. The S&P 500 dropped half a percent and the tech-heavy Nasdaq Composite fell 1.2 percent as big-name technology stocks declined amid apprehensions over the artificial intelligence-driven narratives.
Heightened tensions over trade also kept investors on edge as President Trump said that tariffs he unveiled on Canada and Mexico will proceed as planned once the monthlong delay ends next week.
Trump also stated at a White conference that the U.S. has been taken advantage of by other nations and he would impose reciprocal tariffs to make up a lot of territory. The narrower Dow ended flat with a positive bias.
