Asian shares experienced a decline on Monday following a brief armed rebellion in Russia, which added to the uncertainties surrounding the war in Ukraine. Tokyo, Sydney, Hong Kong, and Shanghai all saw a decrease, while Seoul witnessed a rise. The rebellion, led by mercenary soldiers who briefly seized a Russian military headquarters on their way to Moscow, has now been quelled. However, this incident has weakened President Vladimir Putin’s position at a time when his forces are facing a fierce counteroffensive in Ukraine.
Yevgeny Prigozhin and his Wagner troops were among Russia’s most formidable fighters in Ukraine. The failed takeover of the capital has also left their fate uncertain. The Nikkei 225, Japan’s benchmark index, dropped nearly 0.3%, closing at 32,698.81. On the other hand, South Korea’s Kospi rose by 0.5% to reach 2,582.20. Hong Kong’s Hang Seng declined by 0.2% to 18,853.18, while the Shanghai Composite, which reopened after a holiday, experienced a 1.5% drop to 3,150.62. Australia’s S&P/ASX 200 also saw a decline of 0.3%, ending at 7,078.70.
On Friday, Wall Street recorded its first losing week in six. The S&P 500 fell by 0.8% to reach 4,348.33, moving further away from last week’s peak, which marked its highest level in over a year. The Dow Jones Industrial Average declined by 0.6%, closing at 33,727.43, while the Nasdaq composite sank by 1% to reach 13,492.52.
According to Clifford Bennett, the chief economist at ACY Securities, “We are currently facing a slowing US and global economy, coupled with ongoing extreme inflation and high interest rate levels that continue to rise. Given this scenario, there is no bullish stock market projection.”
The high-interest rates in the United States have already caused a contraction in the manufacturing and other industries, along with several failures in the banking system that have affected confidence. While the Federal Reserve did not raise rates last week, its Chair, Jerome Powell, stated that they may implement a couple more hikes by the end of this year.
A preliminary report from last week indicated that the overall US economy is still growing, although manufacturing is shrinking and output has reached a five-month low.
In energy trading, benchmark US crude gained 44 cents to reach $69.60 per barrel in electronic trading on the New York Mercantile Exchange. On Friday, it fell by 35 cents to $69.16. Brent crude, the international standard, added 55 cents to reach $74.40 a barrel.
In currency trading, the US dollar fell to 143.02 Japanese yen from 143.58 yen. The euro was valued at $1.0901, slightly down from $1.0903. In the bond market, the yield on the 10-year Treasury declined to 3.73% on Friday from 3.79% late Thursday.
(With inputs from AP)
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.