Asian stock markets were mostly lower on Monday, following the broadly negative cues from Wall Street on Friday. This reflected lingering concerns about a recession and the global economic outlook, amid aggressive interest rate hikes by central banks around the world.
The Australian stock market reversed early gains and was modestly lower on Monday, extending the losses from the previous session. The benchmark S&P/ASX 200 fell to 23-month lows below the 6,500 level, dragged down by weakness in technology stocks.
Traders were also cautious ahead of the Reserve Bank of Australia’s monetary policy meeting on Tuesday, where the RBA was expected to hike rates by 50 basis points.
In economic news, the manufacturing sector in Australia continued to expand in September, albeit at a slower pace, according to the latest survey from S&P Global. This was despite a more than expected acceleration in inflation, which is likely to further convince the Fed that it must maintain its aggressive stance regarding future rate hikes.
The Japanese stock market was significantly higher on Monday, after initially tracking the broadly negative cues from Wall Street on Friday. The Nikkei 225 moved above the 26,100 level, after Japanese Finance Minister Shunichi Suzuki affirmed his position to take decisive actions in the currency market if the yen surge continued.
Large manufacturing in Japan weakened in the third quarter of 2022, the Bank of Japan’s quarterly Tankan Survey of business sentiment showed. However, the outlook for the sector came in at +9, which missed expectations.
In the currency market, the U.S. dollar was trading in the higher 144 yen-range on Monday.
Elsewhere in Asia, New Zealand, Hong Kong, Singapore, Malaysia, Taiwan and Indonesia were lower by between 0.4 and 0.8 percent each. South Korea was closed in observance of National Day and China was closed for the Golden Week holiday until October 10.
On Wall Street, stocks fluctuated in morning trading on Friday before once again coming under pressure over the course of the afternoon. The major averages extended the sharp pullback seen on Thursday, ending the session at their lowest closing levels since late 2020.
Crude oil futures failed to hold early gains and settled lower on Friday as worries about the outlook for energy demand weighed on prices. West Texas Intermediate Crude oil futures for November ended lower by $1.74 or 2.1 percent at $79.49 a barrel.