Market Talk – Thursday, Feb. 18

ASIA:

American companies would lose hundreds of billions of dollars if they slashed investment in China or the nation’s increased tariffs, the US Chamber of Commerce said in a report highlighting the cost of a full decoupling of the world’s largest economies. US Chamber of Commerce, along with a New York-based data and analytics firm Rhodium Group conducted a joint study, and the report says American gross domestic product would see a one-time loss of as much as $500 billion should US companies reduce foreign direct investment in China by half and Applying a 25% tariff on all two-way trade would trim US GDP by $190 billion annually by 2025. The US and China fought a trade war under President Donald Trump that continues to see tariffs applied on about $335 billion of Chinese goods annually, according to the calculations by Chad Bown at the Peterson Institute for International Economics. That’s despite a phase-one agreement reached in 2020, where China promised to purchase more American products.

India’s federal cabinet on Wednesday approved a USD 1.68 billion plan to promote local manufacturing and export of telecoms and networking gear, Reuters reported. The scheme will offer gear makers annual cash incentives of between 4% and 7% on any increase in sales of locally-made equipment over the next five years, compared with 2019-20 levels. The plan is part of Prime Minister Narendra Modi’s efforts to make India an electronics production hub and to create jobs. It is also aimed at cutting imports, especially from China. Last year, India launched a $6.65 billion incentive plan to deepen smartphone manufacturing in the country.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 56.10 points or -0.19% to 30,236.09
  • Shanghai increased 20.27 points or 0.55% to 3,675.36
  • Hang Seng decreased 489.67 points or -1.58% to 30,595.27
  • ASX 200 increased 0.70 points or 0.01% to 6,885.90
  • Kospi decreased 47.07 points or -1.50% to 3,086.66
  • SENSEX decreased 379.14 points or -0.73% to 51,324.69
  • Nifty50 decreased 89.95 points or -0.59% to 15,118.95
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