Investing.com – Asian stocks fell sharply on Monday, extending last week’s losses, as concerns grew about a slowdown in the U.S. economy, while Japanese markets were heading into a bear market from July’s all-time highs.
Markets followed Wall Street’s plunge on Friday after non-farm payrolls data came in sharply weaker than expected, fueling concerns that the Federal Reserve will keep interest rates high for too long and prevent the economy from a soft landing. Other middling economic data this week and mixed earnings from heavyweight technology stocks also hammered U.S. markets, sending a weak signal for regional stocks.
U.S. stock futures fell further in Asian trading on Monday.
Japan’s Nikkei Index, Topix stock prices see bear market
Japanese stocks fell 5.5% on Monday, while the broader market plunged nearly 7%. Both indexes are currently down more than 20% from their all-time highs set in July, and would enter a bear market if they closed at current levels.
Japanese stocks have been hit by massive profit-taking, with foreign investors pulling money as the yen surged in value.
The trend was driven by hawkish signals from the Bank of Japan, which raised interest rates last week and hinted at a possible hike in 2024.
Middle income for heavyweight automaker toyota Motor (NYSE:) Corp (TYO:) set a downbeat tone for markets in Japan, which is due to release a slew of important earnings reports this week. Sony Corp (TYO: ) and SoftBank Group Corp (TYO: ) are due to report earnings in the coming days.
Some positive PMI data limits China’s losses
The decline was relatively small given that China’s stock market and stock indexes have already fallen sharply over the past two months.
The two major indexes fell 0.3% and 0.4% respectively and remained at more than five-month lows. Hong Kong’s index fell 1%.
Private sector data released on Monday showed that China’s services sector grew slightly faster than expected in July, suggesting the economy has some resilience.
The data slightly improved sentiment toward China after last week’s dismal manufacturing data.
A series of important Chinese economic data will be released this week, including data.
Asia reeling from growth worries
Asian stocks fell across the board as prospects of worsening economic conditions dented interest in risk-driven stocks. Safe-haven assets such as the yen and gold saw inflows.
The Australian stock market fell 2.5%, and the market focus turned to Tuesday, with the central bank widely expected to keep interest rates stable.
South Korean stocks fell 5.5%, extending losses on weakness in technology stocks. The sector has been hit by a double whammy of profit-taking and modest gains from major U.S. technology companies.
Indian index futures opened on a negative note, with more profit-taking expected in Indian equities after the Nifty surged to a record high above 25,000 points last week.
