As of April 7, 2025, Asian market experienced a humongous crash, with many indices
recording their largest drops since the beginning of COVID-19. This crash has been driven by the new tariff policy which the U.S. President Donald Trump introduced on April 2, 2025.
Key Market Drops
- Hong Kong’s Hang Seng index plunged by 13.7%, marking its biggest fall since COVID-19.
- Japan’s Nikkei 225 experienced a 7.8% drop, closing at 31,136.
- South Korea’s KOSPI slumped by 5.57%, reaching a 17-month low.
- China’s major stock indices fell by 6.5%.
- India’s Sensex dropped by 3,300 points, and NIFTY by 1,100 points.
- Taiwan’s stock market saw a decline of nearly 10%.
Key Factors Behind the Asian Market Crash
The primary reason behind this collective crash is uncertainty and fear fuelled by the ongoing trade war, particularly Trump administration’s tariff policies. Export-dependent economies like China, Vietnam, Japan have been directly impacted by these tariffs. It has also disrupted the global supply chain, with semiconductor manufacturing leader Taiwan and electronic giant China being severely affected due to the mass cancellation of orders.
China’s retaliatory tariffs on the US have sent shockwaves across the world, leading investors to engage in panic selling.
Currency Volatility Amidst Trade War
Currencies have been trembling due to the trade war backlash. The Indian Rupee (INR) is trading at approximately 85.8 against the US dollar. The Chinese yuan has plunged to a three-year low. BRICS and other emerging market currencies have faced similar pressures. Investors are rushing to safe haven assets like gold and silver, and buying bonds to mitigate risks. Central banks are closely
monitoring the situation and are prepared with emergency plans.
Asian Market Sentiments and Future Projections
The overall sentiment in the market is bearish, with fear feeding further fear. The pain sell-off in Asian markets is expected to drag European and US markets down when they open. Experts warn investors and traders that there is still scope for further correction, especially as US markets open later tonight at approximately 7:00 PM IST on April 7, 2025.
Structural Shifts and Investor Advice
This crash may not just be a correction but a structural shock aimed at weeding out weak hands from the market. The rise of protectionism from globalism, shift from free trade to bilateral trade
agreements, and moving from international trade in USD to trade in local currencies pegged by gold suggest a new world order. For investors, remembering Warren Buffet’s advice, “Price is what you
pay, value is what you get,” is crucial during these testing times. Additionally, monitoring central banks’ actions, commodities indices, bracing for more volatility, hedging exposures, and recognizing that the crash may not be over yet are key strategies to navigate this turbulent period.
