Asian markets down amid US economic concerns

Asian markets declined on Monday as concerns over a potential US economic downturn hit Wall Street, though US stock futures showed a slight recovery.

China’s data revealed a 1.8 per cent drop in producer prices year-on-year (YoY) in August, surpassing the expected 1.4 per cent decline, while consumer prices rose 0.6 per cent, driven mainly by food prices.

Japan’s Nikkei lost 2.4 per cent, extending last week’s losses, and South Korea’s market fell 1.3 per cent. Meanwhile, S&P 500 and Nasdaq futures each edged up by 0.2 per cent.

Uncertainty continues over potential Federal Reserve rate cuts as analysts debate whether mixed US labour data justifies aggressive monetary easing. Fed fund futures indicate a 33 per cent chance of a 50 basis point cut, but Barclays economists expect a smaller 25 basis point reduction, followed by further cuts into next year.

The European Central Bank (ECB) looks set to reduce rates by a quarter point this week, with uncertainty around future cuts.

On the other hand, Oil prices rebounded, with Brent reaching $72.07 per barrel and US crude rising to $68.69 per barrel.

Attribution: Reuters

Subediting: M. S. Salama