Asian stocks saw a mostly downward trend on Monday following President Joe Biden’s decision to exit the 2024 race. This negative start to the week came after losses on Wall Street, as businesses worldwide worked to manage disruptions from a significant technology outage.
U.S. futures remained steady while oil prices went up.
Biden’s announcement of his withdrawal from the race on Sunday, along with endorsing Vice President Kamala Harris against former President Donald Trump, added to uncertainties surrounding the world’s largest economy.
Japan’s Nikkei 225 index fell by 1.2% to 39,599.00.
Meanwhile, the Hang Seng in Hong Kong rose by 1.3% to 17,640.51 and the Shanghai Composite index dropped by 0.6% to 2,964.22 following China’s unexpected rate cut of its one-year benchmark loan prime rate and the five-year loan prime rate.
China took these actions to support slowing growth and address a prolonged property slump after reporting slower-than-expected economic growth in the second quarter.
“Chinese commercial banks’ net interest margins are already at record lows and non-performing loans have been growing rapidly; rate cuts will likely add to the pressure on Chinese banks.,” commented Lynn Song of ING Economics.
In other parts of Asia, Australia’s S&P/ASX 200 index dropped by 0.6% to 7,926.30 while South Korea’s Kospi index fell by 1% to 2,767.62.
On Friday, the S&P 500, Dow Jones Industrial Average, and Nasdaq composite saw declines, partly due to a major outage caused by a faulty update sent to computers running Microsoft Windows.
Despite the market reaction, experts believe that the incident will likely blow over without revealing any larger issues within the cybersecurity industry or the companies involved.
In the bond market, yields saw a slight increase, with the 10-year Treasury yield rising to 4.23%.
Early on Monday, U.S. benchmark crude oil prices rose to $78.95 per barrel, while Brent crude reached $82.98 per barrel.
Lastly, the U.S. dollar weakened against the Japanese yen and the euro.
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