Asian markets traded mixed on Monday as investors reacted to Wall Street’s worst session of the year, driven by concerns over a slowing US economy and persistent inflation.
Meanwhile, European markets and the euro climbed following Germany’s election, where conservative leader Friedrich Merz emerged victorious, though coalition talks remain uncertain.
Australia’s S&P/ASX 200 was largely flat amid choppy trading.
In South Korea, the Kospi fell 0.76%, while the Kosdaq dropped 1.01%.
Hong Kong’s Hang Seng Index edged 0.13% higher at the open, while China’s CSI 300 slipped 0.46%.
Japanese markets remained closed for a public holiday.
Singapore’s January inflation report is due later in the day, with a Reuters poll forecasting the city-state’s consumer price index (CPI) at 2.15% year-over-year, up from 1.60% in December.
Core inflation, which excludes accommodation and private transport, is expected to ease to 1.5%, down from 1.8% in the prior month.
Wall Street reels from sharp losses
US stocks ended sharply lower on Friday as economic data pointed to weakening growth and stubborn inflation.
The sell-off deepened on fears of potential policy moves by President Donald Trump, who has already announced new tariffs and regulatory shifts in his first month back in office.
- Dow Jones Industrial Average dropped 748.63 points (-1.69%) to 43,428.02, marking its worst session of the year and extending a two-day decline to nearly 1,200 points.
- S&P 500 slid 1.71% to 6,013.13, retreating after hitting a record high last Wednesday.
- Nasdaq Composite tumbled 2.2%, closing at 19,524.01, as tech stocks bore the brunt of selling pressure.
German election fuels optimism in European markets
European stocks and the euro advanced on Monday after Germany’s election results delivered no unexpected surprises.
DAX futures jumped 1.1%, while the euro strengthened 0.5% to $1.0516, approaching its January high of $1.0535.
EUROSTOXX 50 futures climbed 0.4%, while FTSE futures added 0.1%.
Despite Merz’s victory, uncertainty looms over Germany’s next coalition government, as negotiations will determine whether a one- or two-party coalition will take shape.
The political landscape could impact Germany’s economic policies and European Union dynamics, particularly as EU leaders prepare for an extraordinary summit on March 6 to discuss further Ukraine aid and defense spending.
Investors are now turning their attention to AI powerhouse Nvidia, whose upcoming earnings report could influence global market sentiment.
With tech valuations at record highs, Nvidia’s results will be a key test for whether the AI-driven rally in US stocks can continue.
Perpetual shares drop after scrapping KKR deal
Shares of Australia’s Perpetual Ltd fell 3.62% on Monday after the asset management firm announced it had terminated talks with KKR over the sale of its wealth management and corporate trust businesses.
The deal, reportedly valued at A$2.2 billion ($1.4 billion), was called off after an independent expert deemed it “not in the best interests of shareholders.”
Despite ending discussions with the US private equity giant, Perpetual stated it would pursue a separate sale of its wealth management division.
KKR, meanwhile, has claimed that a break fee is payable and has reserved the right to seek further damages, according to Perpetual’s filing. The Australian firm, however, rejected KKR’s claims.
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