-- Most Asian stocks rose on Friday, tracking strength in Wall Street after more signs of a cooling U.S. labor market reinforced expectations for rate cuts later this year.

But Chinese stocks lagged their peers, stopping just short of entering a technical bull market after multiple reports said that the Biden administration was set to roll out new trade tariffs on the country, specifically against the electric vehicles sector. 

Barring China, regional markets took a positive lead-in from Wall Street, after a bigger-than-expected increase in weekly unemployment claims factored into expectations of interest rate cuts by the Federal Reserve. 

U.S. stock index futures rose in Asian trade.

Chinese stocks sink on fears of more US trade tariffs 

China’s and indexes fell about 0.5% each on Friday, retreating from recent peaks and hovering just below bull market territory after multiple reports said the U.S. was set to impose more trade tariffs on China, particularly the EV sector. 

China’s massive battery and solar energy industries are also likely to face increased tariffs, which could be unveiled as soon as next week.

The move points to more pressure on the Chinese economy, and could also further sour relations between the world’s biggest economies, unsettling a fragile recovery in China. 

Still, Chinese stocks were sitting on stellar gains over the past three months, amid some positive economic indicators and as Beijing kept up its pace of stimulus measures. 

Hong Kong stocks shrug off China weakness on dividend tax waiver 

Hong Kong’s index was the best performer among its Asian peers, rising 1.1% despite losses in heavyweight mainland and EV stocks. 

Gains were driven chiefly by reports that China was considering exempting mainland investors from taxes on dividends earned from investing in Hong Kong stocks.

The potential move comes amid persistent effort from Beijing and Hong Kong to help support local equity markets, which were battered over the past three years. 

The Hang Seng was trading at an eight-month high after recently entering a bull market from lows hit in February.

Broader Asian markets advanced on Friday, amid growing conviction that the Fed will cut interest rates in September. But anticipation of key U.S. inflation data, due next week, kept overall gains muted. 

Japan’s rose 0.4%, while the index added 0.7%. 

Further gains in Japanese stocks were held back by data showing a pick-up in through March, which could herald stronger inflation in the coming months.

Australia’s rose 0.4%, while South Korea’s added 0.5%. 

In Singapore, shares of Oversea-Chinese Banking Corp (SGX:) rose 1.7% after it clocked a bumper first-quarter profit and said it planned to buy out insurer Great Eastern for over S$1 billion.

Futures for India’s index pointed to a muted open, after the index slid 1.6% on Thursday amid persistent uncertainty over the 2024 general elections.