Trump Effect: Once again after returning to the US government, President Donald Trump has emphasized on increasing investment in AI. Tech companies have got good support from his policy. Asian markets were thrilled by Trump’s policy of increasing investment in AI. Japan’s Nikkei 225, Taiwan’s Taiwan Weighted and South Korea’s Kospi index jumped more than 1 percent each. There are positive trends in India too and equity benchmark indices BSE Sensex and Nifty 50 are also green. However, there is selling pressure on the fear of tariff war in China.
Why did Donald Trump’s AI plan get the green light?
Donald Trump has announced to promote AI investment led by SoftBank Group, OpenAI and Oracle. Due to this, the contracts of American stocks jumped. Due to this, shares of SoftBank Group jumped by more than 9 percent. Its shares reached a record high since July on Trump’s plan. Speaking on Bloomberg TV, Vicki Chi, Asian equity money manager at Robeco in Hong Kong, says Trump’s Asian tech supply chain is already performing better and now it has also benefited from the AI push. Craig Johnson of Piper Sandler says that due to softening of inflation data, better earnings of banks and recovery from negative sentiment, good buying returned in the equity market last week and now it will be supported by Trump’s business and investment interest policies. .
Why selling pressure in Chinese market?
Donald Trump’s AI policy is visible in the Asian market but there is pressure in the Chinese market. The business environment is expected to improve under the Trump government, but there is apprehension among investors that China may be hit by tariffs. Frederick Neumann, Chief Asia Economist of HSBC in Hong Kong, says that if Trump gives a tariff shock to China, its exports may be affected. He says that this has come at a time when China’s economy is already facing problems and apart from talks, China cannot do anything at the moment. At the ongoing Annual World Economic Forum in Davos, China’s Vice Premier Ding Xuexiang said that China can increase imports for balanced trade.
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