Asian Shares Trade Mixed Amid U.S. Inauguration: A Tale of Two Markets

Asian markets reacted with a mix of caution and optimism to the inauguration of U.S. President Donald Trump, with some indices rising while others remained flat or declined. The Hang Seng in Hong Kong hit its highest level since December 31, 2024, lifted by consumer cyclicals and health-care firms, while the Nikkei 225 in Tokyo climbed 1.2% to 38,914.60. However, the Kospi in South Korea was nearly flat at 2,524.12, and the Kosdaq declined 0.34% (Source: AP, January 20, 2025).



The mixed performance of Asian markets can be attributed to several factors, including the tone of Trump's inauguration speech, expectations for his policies, and the overall economic outlook. Upbeat comments by U.S. and Chinese officials ahead of the inauguration may have alleviated some concerns over trade tensions, boosting market sentiment. However, lingering uncertainties about Trump's tariff stance and the potential impact on Asian economies may have held back some investors.

The tech sector, particularly the "Magnificent Seven" companies, has been under pressure recently due to criticism that their prices may have shot too high after leading the market for so many years. However, these companies' fundamentals, such as strong revenue growth and profitability, have driven their stock prices higher in the long term. For instance, Apple's revenue grew from $215.6 billion in 2016 to $365.8 billion in 2020, while its net income increased from $45.7 billion to $57.4 billion during the same period (Source: Apple's Annual Reports).

Asian companies, particularly those in the tech sector, have shown varying performance under different U.S. leadership. Under Trump's first term (2017-2021), these companies generally performed well, driven by strong fundamentals. However, some companies faced challenges due to Trump's trade policies and tariffs. Under Biden's administration (2021-present), these companies have continued to perform well, with strong fundamentals driving their stock prices higher. However, some companies have faced regulatory scrutiny and antitrust concerns under Biden's administration.

In conclusion, Asian markets reacted with a mix of caution and optimism to the inauguration of U.S. President Donald Trump, with some indices rising while others remained flat or declined. The performance of Asian markets was influenced by factors such as the tone of Trump's inauguration speech, expectations for his policies, and the overall economic outlook. The tech sector, particularly the "Magnificent Seven" companies, has been under pressure recently but has shown strong long-term performance driven by fundamentals. Asian companies have shown varying performance under different U.S. leadership, with trade policies and regulations playing a significant role in their performance.