Asian stocks fell due to Israel-Hamas conflict worries, with Japan’s Nikkei leading losses before crucial economic data this week.
Nikkei plummeted by 2.03% to ¥31,634.50 on Monday, with tech stocks taking the hardest hit, declining 1.9%.
The index rallied last week due to a potentially dovish Bank of Japan (BOJ) and the strength in Japanese companies catching foreign buyers’ interests.
With declining risk appetite, investors have locked in profits, particularly in tech, due to concerns over rising interest rates from the Federal Reserve.
Investors adopted a more cautious stance on Japan, awaiting crucial September inflation data later this week. Any indications of persistent inflation could lead to more policy tightening from the BOJ.
Markets were tense due to the Israel-Hamas conflict, with Israel’s ground assault preparations in Gaza fueling concerns of a spillover into the Middle East. However, US Secretary of State Antony Blinken said Arab nations were keen on preventing the war from spreading further.
However, risk appetite remained subdued, pressured by fears of higher US interest rates after a strong inflation report last week.
Broader Asian markets also fell on Monday. South Korea’s KOSPI dipped by 0.81% to ₩2,436.24, while Australia’s S&P/ASX 200 declined by 0.35% to A$7,026.50.
On the other hand, India’s Nifty 50 futures traded positively by 0.06% to ₹19,765.55 after the country’s consumer price index (CPI) slowed to a three-month low of 5.02% in September.
Japan, China Inflation Data Await
Asian markets started the week cautiously, with Tokyo stocks leading the slide as traders await crucial economic data from China and Japan this week.
September inflation data for Japan is scheduled to be published on Friday, ahead of the BOJ’s monetary policy meeting on October 30 and 31.
China will also disclose its third-quarter gross domestic product (GDP) figures on Wednesday, a highly anticipated economic data. Markets expect to see a 4.4% year-on-year growth, a 1.9% decline from the second quarter’s 6.3%.
Meanwhile, the Bank of Korea (BOK) will announce its interest rate decision on Thursday. Since February, the central bank has left rates unchanged at 3.5% for five consecutive meetings.
