{"id":72593,"date":"2026-10-04T23:08:16","date_gmt":"2026-10-05T03:08:16","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-rally-as-nikkei-reclaims-70000-uk-prepares-chinese-ev-tariffs\/72593\/"},"modified":"2026-10-04T23:08:16","modified_gmt":"2026-10-05T03:08:16","slug":"global-markets-rally-as-nikkei-reclaims-70000-uk-prepares-chinese-ev-tariffs","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-rally-as-nikkei-reclaims-70000-uk-prepares-chinese-ev-tariffs\/72593\/","title":{"rendered":"Global Markets Rally as Nikkei Reclaims 70,000; UK Prepares Chinese EV Tariffs"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Japan\u2019s Nikkei 225 (<a href=\"\/stock\/NKY\">NKY<\/a>) surged past the 70,000 mark<\/strong> for the first time since July, driven by renewed optimism in artificial intelligence and a dovish shift in U.S. interest rate expectations.<\/li>\n<li><strong>The United Kingdom is set to impose tariffs of up to 45% on Chinese electric vehicles<\/strong>, aligning with European Union trade policies to protect domestic manufacturing and maintain access to the &quot;Made in Europe&quot; initiative.<\/li>\n<li><strong>The IMF reached a staff-level agreement with Sri Lanka<\/strong> on the seventh review of its Extended Fund Facility (EFF), unlocking approximately <strong>$345 million<\/strong> in critical financing.<\/li>\n<li><strong>Middle East <a href=\"https:\/\/stockmarketwatch.com\/energy\/crude-oil\" data-internallinksmanager029f6b8e52c=\"12\" title=\"Crude oil\">crude oil<\/a> exports have rebounded above pre-war levels<\/strong>, reaching between 19.5 million and 22.5 million barrels per day despite a rise in tanker attacks in the Strait of Hormuz.<\/li>\n<li><strong>North Sea oil supplies face &quot;severe disruption&quot;<\/strong> as over 160 Apache (<a href=\"\/stock\/APA\">APA<\/a>) offshore workers backed strike action that could idle the Forties Pipeline System, which handles nearly 30% of the UK\u2019s oil.<\/li>\n<\/ul>\n<h2>Asian Markets and AI Optimism<\/h2>\n<p><strong>Japan\u2019s Nikkei 225 (<a href=\"\/stock\/NKY\">NKY<\/a>)<\/strong> reclaimed the psychological <strong>70,000 level<\/strong> on Monday, gaining <strong>2.5%<\/strong> to close at <strong>70,024.27<\/strong>. The rally was fueled by a technology surge following softer-than-expected U.S. payroll data, which reduced bets on further Federal Reserve rate hikes. <em>Investors are increasingly focused on the AI sector<\/em>, with major gains seen in SoftBank Group (<a href=\"\/stock\/SFTBY\">SFTBY<\/a>) and chip-related heavyweights like Advantest and Tokyo Electron.<\/p>\n<p>Bank of Japan Deputy Governor <strong>Shinichi Uchida<\/strong> noted that the AI boom is creating a &quot;positive demand shock&quot; that could influence the &quot;neutral rate&quot; of interest (R-star). While AI-driven productivity gains may eventually lower costs, the current massive investment in infrastructure is putting upward pressure on long-term yields. <em>The BoJ is widely expected to consider further rate hikes<\/em> before the end of the year, with the policy rate currently sitting at <strong>1.25%<\/strong>.<\/p>\n<h2>Trade Tensions and EV Tariffs<\/h2>\n<p>The UK government is reportedly preparing a package of tariffs on <strong>Chinese electric vehicle (EV)<\/strong> imports, according to <em>The Times<\/em>. Business Minister <strong>Jonathan Reynolds<\/strong> is leading the initiative amid concerns that Beijing is &quot;dumping&quot; state-subsidized vehicles into the British market. The move aims to match the <strong>45% levy<\/strong> recently implemented by the European Union to prevent the UK from becoming a &quot;backdoor&quot; for Chinese exports.<\/p>\n<p>Failure to align with the EU could result in British carmakers being excluded from the <strong>&quot;Made in Europe&quot;<\/strong> program, a risk deemed more economically damaging than potential Chinese retaliation against brands like Jaguar Land Rover, owned by Tata Motors (<a href=\"\/stock\/TATM\">TATM<\/a>). <em>The decision marks a significant pivot in UK trade policy<\/em>, balancing the need for affordable green technology against the survival of the domestic automotive supply chain.<\/p>\n<h2>Energy Markets and Geopolitical Risks<\/h2>\n<p><strong>Middle East crude exports<\/strong> have shown remarkable resilience, surpassing pre-war levels in late September despite ongoing conflict and increased tanker attacks. Data from Kpler indicates that regional exports averaged between <strong>19.5 million and 22.5 million barrels per day (bpd)<\/strong> during peak days last week. However, security risks remain high; the <strong>Kazimah III<\/strong> tanker was recently struck by a projectile in the Strait of Hormuz, highlighting the fragility of the recovery.<\/p>\n<p>In the North Sea, the <strong>Unite union<\/strong> warned that a strike by <strong>Apache (<a href=\"\/stock\/APA\">APA<\/a>)<\/strong> workers could bring the <strong>Forties Pipeline System<\/strong> to a standstill. This critical infrastructure handles approximately <strong>29% of the UK&#39;s oil<\/strong> and <strong>30% of its gas<\/strong>. While Apache has offered a <strong>4% pay increase<\/strong>, the union has rejected the proposal as a real-terms pay cut, threatening industrial action that could ripple across other major operators including BP (<a href=\"\/stock\/BP\">BP<\/a>) and Harbour Energy.<\/p>\n<h2>Global Currency and Debt Developments<\/h2>\n<p>The <strong>Euro<\/strong> weakened to <strong>$1.1213<\/strong>, its lowest level since May 2025, as traders reacted to shifting interest rate differentials between the ECB and the Fed. Meanwhile, the <strong>Canadian dollar<\/strong> remains pinned near multi-year lows despite the broader softening of the U.S. dollar following the weak jobs report. <em>Currency markets are currently navigating a complex environment<\/em> of cooling inflation and divergent central bank paths.<\/p>\n<p>In South Asia, <strong>Sri Lanka<\/strong> has secured a staff-level deal with the <strong>IMF<\/strong> for its seventh review, a milestone that signals continued progress in the nation\u2019s debt restructuring. Upon Executive Board approval, the <strong>$345 million<\/strong> disbursement will bring total IMF support under the current arrangement to approximately <strong>$2.7 billion<\/strong>. The agreement remains contingent on the presentation of the 2027 Budget and continued progress with external creditors.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Japan\u2019s Nikkei 225 (NKY) surged past the 70,000 mark for the first time since July, driven by renewed 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