Stocks in Asia plummeted on Monday, with the Shanghai Composite (000001.SS) index falling more than 7% and Hong Kong's Hang Seng (^HSI) index tumbling 13%.
After Asia's markets closed on Friday, China announced that it would be imposing a 34% tariff on all imports of US products from 10 April. This came in retaliation to sweeping global tariffs announced by US president Donald Trump on Wednesday.
Trump announced a 10% baseline tariff on imports into the US which came into effect on Saturday, but also unveiled higher custom levies on some countries which will apply from 9 April. That included a 34% tariff on products imported from China.
Despite the turmoil in markets in the wake of his announcement, Trump showed no signs of backing down over the weekend. When asked on Sunday about the sharp falls in markets, Trump told reporters aboard Air Force One: "I don't want anything to go down, but sometimes you have to take medicine to fix something."
The FTSE 100 (^FTSE) slid 4.6% on Monday morning, with shares in HSBC (HSBA.L) and Standard Chartered (STAN.L) both falling nearly 6%, as banks that are more exposed to Asia.
Oil major Shell (SHEL.L) warned in a trading update on Monday that it expected to see lower liquified natural gas (LNG) volumes in the first quarter of 2025.
Shares tumbled 7.5% after Shell (SHEL.L) said it expected to LNG liquefaction volumes of 6.4 million to 6.8 million tonnes in the period, down from a previous forecast of 6.6 million to 7.2 million.
The energy giant said that the updated forecast reflected the impact of cyclones, as well as unplanned maintenance, in Australia.
As for oil, Shell (SHEL.L) said it expected to generate upstream output of 1.79 million to 1.89 million barrels equivalent per day. This compared to a previous forecast of 1.75 million to 1.95 million barrels equivalent per day. In addition, the company posted an indicative refining margin of $6.2 (£4.82) a barrel for the first quarter, which would be up from $5.5 a barrel in the previous three months.
Shares in Shell were also under pressure as oil prices extended last week's losses on Monday, with brent crude (BZ=F) down 3%, amid fears that an escalating trade war could lead to a recession and impact demand for fuel.
Long-time Tesla (TSLA) bull Dan Ives, senior equity research analyst at Wedbush Securities, has slashed his price target on the stock by 43%, citing the impact of CEO Elon Musk's political activities and Donald Trump's trade policies.
"Tesla (TSLA) has essentially become a political symbol globally," Ives said in a report on Sunday, according to a Bloomberg report. "It is time for Musk to step up, read the room, and be a leader in this time of uncertainty."
Ives lowered his price target on Tesla (TSLA) shares to $315 from $550, which was the second-highest among analysts tracked by Bloomberg.
Shares in the electric vehicle (EV) maker were down nearly 7% in pre-market trading on Monday. Tesla's (TSLA) share price is down nearly 41% year-to-date, as a backlash against Musk has grown over his political interventions, heading up Trump's Department of Government Efficiency (DOGE) and overseeing cuts to government agencies.
Hong Kong-listed shares in Chinese tech giant Alibaba (9988.HK) dropped 18% on Monday, as a tariff-fuelled sell-off deepened in Asia.
Russ Mould, investment director at AJ Bell (AJB.L), said: "It’s rare to see double-digit falls in a single day for a major stock index, yet today is one of those days that will go down in history."
He said that the 13% drop in the Hang Seng (^HSI) index came as "investors played catch-up in pricing in tariff risks in Asia after parts of its stock market were closed last Friday. In essence, Asia is lumping two horrible days on the market into one.
“That is the fourth-biggest one-day decline ever in the Hang Seng (^HSI). We're seeing the biggest falls in Asia because it arguably has the most to lose from Trump’s tariffs.
"Asian countries have thrived from selling goods to the West, with places like the US having been hungry to access cheap labour. Asia became a huge manufacturing hub to the US and this situation now threatens to crumble unless Trump backs down or deals can be made to lower tariffs."
British Airways owner International Consolidated Airlines Group (IAG.L) was the biggest faller on the FTSE 100 (^FTSE) on Monday, with its shares down 8% amid concerns of a tariff-fuelled recession.
In a note on Thursday, Barclays (BARC.L) analysts said: "We see European tourism to the US weakening in the face of political differences between Europe and the US. At the risk of stating the obvious, the tariff announcements seem likely to accelerate all these factors.
"The North Atlantic is crucial to the economics of the European flag carriers and we see simultaneous threats to corporate, premium leisure and leisure travel originating at each end of the route."
The analysts had an underweight rating on major European flag carriers, including IAG (IAG.L), as well as Air France-KLM (AF.PA) and Lufthansa (LHA.DE).
