Asian markets mostly declined on Monday following Wall Street’s weak close last week, as investors reacted to disappointing U.S. economic data and renewed inflation fears. Meanwhile, Frankfurt’s stock market and the euro saw gains after Germany’s conservative CDU/CSU alliance secured a key election victory.
Asian Markets Struggle After Wall Street Slump
After a strong performance on Friday, Hong Kong, Shanghai, Seoul, Mumbai, Taipei, Manila, Jakarta, Bangkok, and Wellington all saw losses, struggling to maintain momentum.
- The Nasdaq dropped over 2% last week after reports showed:
- U.S. services sector activity fell to a 25-month low in February.
- Consumer sentiment plunged nearly 10% from January.
- Inflation expectations hit a 30-year high.
These data points, coupled with concerns over Donald Trump’s economic policies, have led investors to scale back expectations for multiple U.S. Federal Reserve interest rate cuts this year.
European Markets React to German Elections
While London edged up and Paris slipped, Frankfurt’s DAX index and the euro gained after Friedrich Merz’s CDU/CSU secured over 28% of the vote, defeating Olaf Scholz’s SPD, which finished third.
However, there was some market anxiety after the far-right Alternative for Germany (AfD) nearly doubled its vote share to over 20%.
- Friedrich Merz called for a swift coalition formation, acknowledging the global urgency, saying:
“The world isn’t waiting for us.” - Rodrigo Catril, senior forex analyst at NAB, noted that markets would favor a stable government formation.
- Stephen Innes of SPI Asset Management warned that Germany’s new leadership may focus on stricter immigration policies instead of economic recovery measures, given the AfD’s rise.
Oil Prices Decline Amid Demand Concerns
Oil prices extended losses after tumbling 3% on Friday, as weak U.S. economic data fueled demand fears.
Additionally, investors are growing concerned that Trump may ease sanctions on Russia, potentially increasing global oil supply and further dampening prices.
Key Market Figures
- Hong Kong Hang Seng Index: DOWN 0.6% at 23,341.61 (close)
- Frankfurt DAX Index: UP amid election optimism
- Oil Prices: Declining due to weak demand forecasts and potential policy shifts
