Weekly Market Round-Up: March 10–15, 2025. Global Markets Whipsaw Amid Escalating Trade Tensions and Market Volatility

This week, financial markets were driven by heightened trade tensions, shifts in Asian equities, and fluctuations in commodity markets. Investors closely monitored global economic developments, particularly as the U.S. ramped up its tariff measures, impacting various sectors. Here are the key highlights from the past week:

1. U.S. Raises Tariffs on European Alcohol Imports

On March 13, U.S. President Donald Trump announced a 200% tariff on European wine, cognac, and other alcoholic beverages. This move was in retaliation to the European Union’s counter-tariffs on American whiskey and agricultural goods.

Why It Matters:

• The tariff battle between the U.S. and Europe is escalating, raising concerns about global trade relations.

• Industry experts warn that such measures could disrupt businesses on both sides and increase costs for consumers.

• European wine producers are bracing for a sharp decline in exports, while American whiskey makers are facing similar losses in European markets.

This development added to investor nervousness, as global trade instability often leads to market sell-offs and increased volatility.

2. Chinese Stocks Rebound Amid Government Stimulus Measures

Chinese equities experienced a notable rebound this week, with the CSI 300 index rising 2.4%, turning positive for the year. This surge was driven by Beijing's announcement of new measures to boost domestic consumption, aiming to counteract the effects of global trade tensions.

Key Takeaways:

• Government Initiatives:

  • The Chinese government introduced policies to stimulate consumer spending, particularly in sectors like artificial intelligence and green technology.

• Market Reaction:

  • Consumer-oriented companies, including Kweichow Moutai and BYD, saw significant stock price increases.

These developments reflect investor optimism regarding China's ability to navigate external economic pressures through domestic policy support.

3. Indian Gold Demand Declines as Prices Hit Record Highs

Gold prices soared past $3,000 per ounce for the first time this week as investors rushed to safe-haven assets. The surge was driven by global economic uncertainties, particularly escalating U.S. trade tensions and concerns over slowing growth.

In India, gold prices soared to a record 87,886 rupees per 10 grams, leading to a sharp decline in demand. Jewellers reported reduced customer footfall and hesitancy in restocking due to high inventory costs.

Market Impact:

• Widening Discounts:

  • Discounts on gold prices widened to $39 per ounce, the highest in nearly eight months, as dealers attempted to attract buyers.

• Import Decline:

  • India's gold imports plummeted by 85% in February, reaching a 20-year low, underscoring the impact of soaring prices on consumer demand.

This trend highlights the sensitivity of gold consumption in India to price fluctuations and its potential impact on the global gold market.

4. Crude Oil Market Share Battle Intensifies in Asia

A new competition for crude oil market share is emerging in Asia, as top exporters Saudi Arabia and Russia seek to increase shipments to the region. China and India, the largest oil importers, are pivotal in this contest, especially as Russia, affected by Western sanctions due to the Ukraine war, discounts its crude prices.

Market Dynamics:

• Russian Exports:

  • Russian shipments to China and India have declined early this year due to new sanctions, with expectations of a rebound in March.

• Saudi Strategy:

  • Saudi Arabia is increasing its oil exports to China and India, aiming to retain market share by lowering official selling prices following OPEC+'s decisions to unwind output cuts.

These developments signal a potential intensification of the battle for market dominance, possibly impacting global oil prices, which currently trend downwards.

Market Outlook for Next Week

With global trade relations under pressure and central banks maintaining cautious policies, investors are expected to closely watch key economic data releases and government policy announcements.

Key Events to Watch:

• Further U.S.-EU trade negotiations – Will there be room for a trade deal?

• Economic data from China and the U.S. – Can global demand remain resilient?

• Federal Reserve meeting on 18 to 19 March – Will more policymakers hint at rate cuts?

With markets experiencing higher volatility, investors should remain cautious, diversify portfolios, and monitor policy developments closely.