Asia-Pacific stock markets concluded Tuesday’s trading session with a varied performance as investors digested a sharp contraction in China’s manufacturing activity and continued to grapple with the implications of escalating US trade protectionism.
While some regional bourses managed gains, Indian benchmarks, including the Sensex, extended their losing streak amid domestic concerns and weak global cues.
A significant piece of data influencing market sentiment was the Caixin/S&P Global manufacturing purchasing managers’ index (PMI) for China, which revealed that factory activity in May shrank at its fastest pace since September 2022.
The PMI came in at 48.3, missing Reuters’ median estimate of 50.6 and falling sharply from 50.4 in April.
A sharper decline in new export orders within the report highlighted the tangible impact of prohibitive US tariffs on the world’s second-largest economy.
This economic pressure coincided with deteriorating US-China trade relations.
On Monday, China pushed back against US accusations that it had violated a temporary trade agreement, instead blaming Washington for failing to uphold the deal.
This exchange signaled a worsening in negotiations between the two economic superpowers.
Adding to the global trade anxieties, the European Union criticized US President Donald Trump’s stated intention to double steel tariffs to 50%, with an EU spokesperson asserting that such a move “undermines” its own negotiations with the US and that the bloc was “prepared to impose countermeasures.”
President Trump had previously announced that tariffs on steel and aluminum exports to the US would double to 50% starting Wednesday.
Regional market reactions: Hong Kong leads, Japan flat, Australia up
Despite the headwinds, Hong Kong’s Hang Seng Index emerged as a regional leader, ending the day 1.53% higher at 23,512.49.
Mainland China’s CSI 300 also managed to add 0.31% in choppy trading, closing at 3,852.01.
Over in Japan, the Nikkei 225 benchmark pared earlier gains to end the day flat at 37,446.81, while the broader Topix index fell 0.22% to 2,771.11.
Australia’s S&P/ASX 200 benchmark advanced 0.63% to finish at 8,466.70, after briefly touching a near four-month high earlier in the session.
Australia’s seasonally adjusted current account balance for the first quarter of 2025 came in at a deficit of 14.7 billion Australian dollars (9.53 billion).
While this exceeded the AU 13.1 billion deficit forecast by economists polled by Reuters, it marked an improvement from the AU$16.3 billion deficit recorded in the previous quarter’s revised reading.
South Korean markets were closed for polling day.
The impact of the impending US steel tariff hike was evident in the mixed performance of Asia-Pacific steelmakers.
Shares of Chinese state-owned manufacturers Chongqing Iron & Steel, Angang Steel, and Maanshan Iron & Steel were down 1.56%, 0.85%, and 3.51% respectively as of 2:46 p.m.
Singapore time. In Japan, Kobe Steel shares were flat, while JFE Holdings bucked the trend, moving up 0.42%.
Meanwhile, India’s JSW Steel had moved down 0.12%, while Tata Steel was last seen flat, and Jindal Steel and Power had added 0.8%.
Sensex extends losing streak amid multiple pressures
Indian stock markets suffered significant losses on Tuesday, June 3, marking their third consecutive session of declines.
The downturn was attributed to weak global cues, growing concerns over stretched valuations, and notable foreign capital outflow.
The BSE Sensex opened at 81,492.50 against its previous close of 81,373.75 and subsequently crashed nearly 800 points, or 1 percent, to hit an intraday low of 80,575.09.
Similarly, the NSE Nifty 50 opened at 24,786.30 against its previous close of 24,716.60 and also crashed nearly 1 percent to an intraday low of 24,502.15.
Ultimately, the Sensex closed 636 points, or 0.78 percent, lower at 80,737.51.
The Nifty 50 settled at 24,542.50, down 174 points, or 0.70 percent.
Earlier in the session, around 1:33 p.m. Indian Standard Time, India’s benchmark Nifty 50 had moved down 0.64%, while the BSE Sensex had lost 0.88%.
The BSE Midcap and Smallcap indices also ended lower, by 0.52 percent and 0.07 percent, respectively.
US market undercurrents
Despite the cautious tone in Asia, US futures showed some resilience, though they did dip slightly.
This followed a positive start to June’s trading on Wall Street on Monday.
Overnight stateside, the S&P 500 climbed 0.41% to close at 5,935.94, the Nasdaq Composite advanced 0.67% to end at 19,242.61, and the Dow Jones Industrial Average added 35.41 points, or 0.08%, settling at 42,305.48.
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