US stock index futures decline sharply due to ongoing trade tariff concerns. Hong Kong stock market experiences a significant gap down. Gold prices face selling pressure after a strong March rally. Our analysis provides key market insights.
US stock indices extended their rout
US stock index futures extended their declines in today’s early Asian session with the S&P 500 and Nasdaq 100 E-mini futures recording an intraday loss of 3% and 4% respectively due to US trade tariffs woes and potential retaliation measures.
On Sunday, US Commerce Secretary Lutnick said that the US White House will not postpone the 9 April start date for the higher reciprocal tariff rates, in turn, dashed hopes of any near-term trade deal negotiation, especially with China.
The Hong Kong stock market reopened for trading today after a public holiday closure last Friday, 4 April. The Hang Seng Index staged a significant gap down of 8% at the opening and hit a two-month low.
Also read: Tactical view for April – Trade tariffs woes back. Impact on markets.
The market ignored a positive news flow where the People’s Daily, the flagship newspaper of China’s Communist Party, reported today that the China central bank, PBoC, still has further room to enact interest rate cuts and a reduction in the reserve requirement ratio for Chinese banks.
Gold (XAU/USD) seems to be facing the typical “buy the rumour, sell the news” syndrome. After a recent strong rally in March, where it recorded a monthly gain of 9.3% on the backdrop of stagflation fears, it has failed to have a positive follow-through so far in April.
Last Friday, after its intraday rally failed to break above its key intermediate resistance of US$3,137, it ended the US session with a daily loss of 2.5%, its worst single day performance in almost five months.
Hence, the increased probability of the stagflation environment arising from the latest US reciprocal trade tariffs may have already been priced in by the movements of gold last month. Thus, the prices of Gold (XAU/USD) now may see some form of bullish positioning adjustments and unwinding with the next intermediate support to watch at US$2,936 (also the 50-day moving average).
