Asian stocks faced a downturn on Monday, predominantly led by a 5.4% drop in the Shenzhen A-shares index, despite Beijing’s regulatory assurances to combat market abuses. The Shanghai Composite index also slipped over 2%, contributing to the apprehension in the market. U.S. futures declined as oil prices surged.
The China Securities Regulatory Commission vowed to intensify measures against market manipulation and short selling, aiming to attract more long-term funds. However, this move did little to instill confidence as investors continued to withdraw from the markets, resulting in Chinese stocks enduring their worst week in five years.
In addition to regulatory concerns, a report revealed a slight deceleration in China’s services sector growth in January, further dampening market sentiment.
Meanwhile, Tokyo’s Nikkei 225 saw a 0.6% climb, while Australia’s S&P/ASX 200 dropped 1%, and South Korea’s Kospi fell by 0.6%.
On Wall Street, Big Tech stocks, including Meta Platforms and Amazon, propelled the S&P 500 to a record high, with the Nasdaq also gaining 1.7%. However, the Dow Jones Industrial Average, less influenced by tech, posted a more modest increase. The market faced pressure from higher bond yields following a robust jobs report, raising concerns about inflation and potential delays in Federal Reserve interest rate cuts.
Profit reports created a mixed picture, with Meta Platforms and Amazon reporting strong performances, while Charter Communications witnessed a sharp 16.5% decline.
In the commodities market, benchmark U.S. crude rose to $72.67 a barrel, and Brent crude reached $77.85 a barrel. The U.S. dollar slightly weakened against the Japanese yen and the euro.