Asian stock markets presented a mixed picture at Thursday’s open, with Vietnamese equities surging to a more than three-year high as investors reacted to news of a new trade agreement with the United States, announced by President Donald Trump.
While this development fueled optimism in some corners, other regional markets, including Japan, edged lower, as investors continued to assess the broader global trade landscape and awaited a key US jobs report.
The standout performer in early Asian trading was Vietnam. The benchmark Vietnam Index rose 0.3% to its highest level since April 2022, according to data from LSEG.
This rally came after President Donald Trump, via his Truth Social platform, announced a new trade agreement with the Southeast Asian nation.
According to Trump, the US is imposing a 20% tariff on goods imported from Vietnam, while the latter will impose a “ZERO Tariff.” This announcement comes as the deadline for President Trump’s 90-day global tariff reprieve draws closer.
However, the Vietnamese currency, the dong, weakened to a record low of 26,195 per dollar following the news of the trade deal, as shown by LSEG data.
While Vietnam striking a trade deal with the US contributed to a rally in US equities, the optimism may not be universally shared across Asian markets and economies, according to some analysts.
Vishnu Varathan, Mizuho Securities’ head of macro research for Asia ex-Japan, suggested a more cautious interpretation, according to CNBC.
“For one, the deal with Vietnam is a stark reminder of the imbalance in leverage, to the disadvantage of Asian exporters,” he wrote in a Thursday note.
However, Varathan also added that the depreciation of the Vietnamese dong could potentially provide a buffer against the impact of the 20% US tariffs.
Elsewhere in Asia, market performance was varied. Japan’s benchmark Nikkei 225 slipped 0.15%, and the broader Topix index lost 0.21%.
In contrast, South Korea’s Kospi added 0.77%, and the small-cap Kosdaq rose 0.5%. Australia’s S&P/ASX 200 also gained, adding 0.13%.
In Greater China, Hong Kong’s Hang Seng index slipped 0.64%, while mainland China’s CSI 300 managed to add 0.14%.
Indian markets poised for modest gains
Indian benchmark indices, the Sensex and Nifty, are likely to see a modest increase at the open on Thursday, influenced by the pockets of gains seen in other Asian markets following the US-Vietnam trade agreement.
This optimism is also supported by investors keeping a close watch on the progress of a potential trade agreement between the US and India.
Gift Nifty futures were trading at 25,584 points at 8:18 A.M. IST, suggesting a slight increase from the previous close of 25,574.50 and pointing to a potentially positive start for the domestic bourses.
US market backdrop: records set, jobs data awaited
US stock futures were little changed in early Asian hours as traders braced for the release of June’s major jobs report.
S&P 500 futures and Nasdaq 100 futures were fractionally higher, while futures tied to the Dow Jones Industrial Average rose a slight 21 points, or less than 0.1%.
Overnight in the US, the three major averages had closed mixed, but with notable record-setting performances. The S&P 500 scored a fresh all-time intraday high and closed at another record.
The Nasdaq Composite also advanced 0.94% to post a record close of 20,393.13.
The Dow Jones Industrial Average, however, slipped a marginal 10.52 points, or 0.02%, to end at 44,484.42.
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