The Stoxx 50 climbed 0.50% by the close of trading after oscillating between gains and losses, driven by tariff relief following remarks from US Commerce Secretary Howard Lutnick. On Thursday, Lutnick suggested that one-month exemptions could extend beyond automakers. Additionally, the Trump administration is reportedly considering exempting specific agricultural products from tariffs on Mexico and Canada. Meanwhile, the European Central Bank proceeded with an anticipated interest rate cut but took a more cautious approach regarding future adjustments while raising its short-term inflation forecasts.

The Hang Seng jumped 3.30%, marking its third consecutive gain and reaching its highest level in over three years. A broad market rally followed positive policy signals from China’s annual parliamentary meeting. The tech sector surged 5.40%, led by an 8.50% jump in Alibaba Group, which has gained 46% since its 2025 low on 13 January, driven by optimism over its AI initiatives. Consumer, property, and financial stocks also saw strong gains, as traders bet that the latest US tariff hikes under President Trump would not dampen market sentiment, especially given Beijing’s 2025 fiscal stimulus. Meanwhile, the Nikkei advanced 0.77% on Thursday, recording its second straight session of gains.

Brent crude oil futures hovered around $69 per barrel on Thursday after hitting a multi-year low of $68.34 in the previous session. Prices remained under pressure amid persistent trade tensions, with the US imposing tariffs on Canadian and Mexican goods, including energy imports, while OPEC+ considered increasing output. There were also reports that the U.S. might exempt automakers from the 25% tariff and potentially remove the 10% tariff on Canadian energy imports such as crude oil and gasoline.

US stocks declined as concerns over escalating trade conflicts under the new administration and economic policy uncertainty weighed on sentiment. The S&P 500 dropped nearly 2%, while the Nasdaq plunged 2.30%, both reaching four-month lows, and the Dow tumbled 500 points. President Trump confirmed that goods covered under the USMCA would be exempt from tariffs on Mexico shortly after imposing broad levies on North American trade partners. However, restrictions on China and Canada remained in place amid ongoing policy uncertainty. These developments compounded fears over economic growth, especially after weak labour market data showed Challenger job cuts reaching a 2020 high and the ADP employment report missing expectations.

On the local front, the stock market maintained its positive momentum, gaining 0.62%, while the rand strengthened to R18.15/$ by 18h00 local time. South Africa’s current account deficit narrowed to R31.6 billion in 4Q24, down from a revised R55.6 billion in the prior quarter, though it exceeded market forecasts of a R3 billion shortfall. This marked the smallest current account gap since 3Q23, supported by a wider trade surplus of R232.9 billion in the final quarter.