Shares in Asian emerging markets including Thailand rallied by the most in more than two years on Thursday morning as traders snapped up beaten-down stocks after US President Donald Trump announced a 90-day pause on steep import tariffs against dozens of countries.
An MSCI gauge of emerging Asian stocks leapt 4% in its biggest one-day gain since mid-November 2022. A subset of equities in Southeast Asian countries jumped 5%, logging its best day since the start of the Covid-19 pandemic.
The Stock Exchange of Thailand Index, which had sunk 50 points on Tuesday, gained 45.77 points (4.2%) to finish the day at 1,133.95, with turnover of 50.2 billion baht.
Most regional currencies also appreciated against the US dollar. The Malaysian ringgit and Indonesian rupiah rose 0.5%. The latter had hit an all-time low on Wednesday. The Thai baht improved slightly to around 34.20 by late afternoon.
Trump’s abrupt about-face came after his punitive tariffs set off a carnage in global financial markets that sent equities plunging towards bear territory at a breakneck pace, sparked a sell-off in US Treasuries and erased trillions in value.
Singapore’s FTSE Straits Times index surged as much as 9% after shedding 15% from a record high in less than two weeks. Benchmarks in Indonesia and Malaysia also jumped about 5%. Taiwan’s stocks soared more than 9% and South Korea’s Kospi index advanced 6.6%.
In the Philippines, stocks ended 1.2% higher minutes before the central bank slashed its key interest rate by a quarter-point, as widely expected. The Philippine peso remained anchored around 57.30 per dollar.
“The 90-day pause in reciprocal tariffs seems to reduce the likelihood that Emerging Asia is headed for its worst GDP outcomes in this highly fluid moment in global economic history,” Barclays said in a note.
“But it does not, in our view, mean that the region is out of the woods yet.”
Trump’s temporary relief excluded China, Southeast Asia’s largest trading partner and investment source. He hiked import levies on Asia’s biggest economy to 125% after Beijing responded to Trump’s initial tariffs with an 84% duty on US goods.
The tit-for-tat moves by the world’s two biggest economies have kept traders on the edge of their seats.
“A dial-back in trade antagonism is an aligned interest but unfortunately not imminently assured,” said Vishnu Varathan, head of macro research for Asia excluding Japan at Mizuho Bank.
“Instead, the more likely outcome is an extended standoff (in coming weeks), with significant risks of further escalation.”
China and Hong Kong shares also ended higher on Thursday, as investors played down the latest US tariff increase on Chinese imports and pinned their hopes on talks between the world’s two largest economies as well as on market and policy support from state firms.
China’s blue-chip CSI300 Index closed up 1.3%, while the Shanghai Composite Index rose 1.2%. Hong Kong’s benchmark Hang Seng was up 2.1%.
The rise in Hong Kong followed a 6% surge in Chinese internet companies listed on the US market overnight after Trump temporarily cut the steep reciprocal tariffs on dozens of other countries while stepping up his actions against China.
“Even though it’s obvious that the tariffs are targeting China, there is still some room for manoeuvring and negotiations if they can pause tariffs on other countries,” said Jason Chan, senior investment strategist at Bank of East Asia.
“Markets still have some hope that at least some discussions could take place.”
