Investing.com - Asian stock markets started off the week with losses on Monday, amid concerns over a slowdown in China and as emerging markets remained under pressure, damping demand for riskier assets.
During late Asian trade, Australia’s ASX/200 Index closed 0.04% lower, while Japan’s Nikkei 225 Index ended down 1.98%. Markets in Shanghai and Hong Kong remained closed for the Lunar New Year holiday.
Asia was given a negative lead from the U.S., where the Dow, S&P 500 and Nasdaq all ended lower on Friday to cap off their worst monthly loss since August.
In Tokyo, the Nikkei fell to the lowest level since November 13 as the yen strengthened against the U.S. dollar, dampening sentiment.
USD/JPY fell to 101.92, re-approaching an eight-week low of 101.75 hit on January 27. A stronger yen decreases the value of overseas income at Japanese companies when repatriated, reducing the outlook for export earnings.
Automakers Toyota and Mazda saw shares fall 1.6% and 4% respectively, Honda declined 2.3%, while index heavyweights Fast Retailing and Softbank slumped 2.5% and 6.6%.
Japanese megabanks were also lower with shares of the nation’s largest lender Mitsubishi UFJ Financial Group falling 2.6%, while Sumitomo Mitsui Financial Group and Mizuho financial Group retreated 3.8% and 3.7% respectively.
The Nikkei is down over 10% since hitting a six-year peak of 16,320 on December 30, placing the index in technical correction territory.
Meanwhile, in Australia, the ASX/200 Index closed lower as losses in the mining sector weighed on the benchmark index.
Fortescue Metals Group dropped 1.15%, BHP Billiton shed 0.4%, while Rio Tinto fell 0.45%.
Data released over the weekend showed that China’s official manufacturing PMI fell to a six-month low of 50.5 in January from 51.0 in December. Australian commodity producers are heavily reliant on Chinese demand for raw materials.
Looking ahead, European stock market futures pointed to a mostly lower open. The EURO STOXX 50 futures pointed to a loss of 0.2%, France’s CAC 40 futures shed 0.25%, London’s FTSE 100 futures indicated a decline of 0.2%, while Germany''s DAX futures advanced 0.1%.
Across the Atlantic, U.S. equity markets pointed to a flat open. The Dow Jones Industrial Average futures pointed to a gain of 0.01%, S&P 500 futures inched down 0.02%, while the Nasdaq 100 futures indicated a rise of 0.03%.
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