HSBC and Standard Chartered shares sink as ‘outsized’ Asian tariffs bite
Shares in banking giants HSBC and Standard Chartered have taken a significant hit as the global trade war ramps up.
HSBC was down nearly three per cent in early trading on Monday. The lender’s losses in the last five days have now topped 15 per cent.
Meanwhile, Standard Chartered plunged nearly four per cent, with its five-day loss edging towards 20 per cent.
Both lenders have extensive ties to Asian economies, which have been directly attacked with sizeable tariffs from President Donald Trump.
China was handed a 34 per cent tariff taking its total import tax to 54 per cent. Trump had previously slapped a 20 per cent levy on the country, but opted to go further in his ‘Liberation Day’ speech.
China hit back with a 34 per cent reciprocal tariff on US goods and blasted Trump’s approach as “inconsistent with international trade rules”.
Taiwan was issued a 34 per cent tariff and Vietnman was hit with a 46 per cent levy.
Lenders have ‘biggest risks’ in trade war
William Howlett, financial analyst at Quilter Cheviot, said banks have some of the “biggest risks” of the escalating trade war.
He said: “Fundamentally, banks are levered plays on the economies in which they operate.
“The outsized tariffs are seen against Asian economies and in that context, it is understandable that the Asian banks (HSBC and Standard Chartered) have sold off the most.”
John Cronin, founder of SeaPoint insights, added that HSBC and Standard Chartered were more exposed than their UK peers to tariff woes “given their dependence on global trade glows and their presence in jurisdictions that will be subject to higher tariffs than the UK”.
HSBC is one of the largest international banks in Asia, with its business roots tracing back to Hong Kong and Shanghai.
It currently operates under several business areas in the region, including retail banking, wealth management and commercial banking.
Standard Chartered’s operations are mainly focused on emerging markets across Asia, Africa and the Middle East.
In Asia, the lender has taken a focus on the growing middle class in countries such as India, China and Indonesia through offering a variety of retail services, which include savings and checking accounts.
Markets in Asia have taken a blow since Trump’s ‘Liberation Day’ announcement.
The Nikkei closed on a 7.83 per cent loss whilst the Shanghai was down 7.34 per cent.