Asian stocks struggle after tepid Wall St lead, euro dips further

Asian stocks struggle after tepid Wall St lead, euro dips further

Chinese retail sales beat expectations in May, providing some hope for an improvement in consumer activity
Chinese retail sales beat expectations in May, providing some hope for an improvement in consumer activity. Photo: MARK RALSTON / AFP
Source: AFP

Asian markets mostly fell Monday following last week's losses, with traders trying to assess the Federal Reserve's plans for interest rates, while the euro was weighed by political uncertainty as France prepares for a snap parliamentary election.

While data showed US inflation slowed in May provided fresh hope that the central bank will cut interest rates this year, optimism was tempered by policymakers' paring of expectations for how many would be made.

And over the weekend, Minneapolis Fed chief Neel Kashkari said officials need not rush to loosen policy, while his Cleveland counterpart Loretta Mester remained concerned that inflation could still pick back up.

Meanwhile, the spike in prices is having an impact on consumer sentiment, with a gauge hitting a seven-month low in June, figures showed.

The Fed now sees just one rate cut this year, while analyst opinion varies from zero to three.

Read also

Asian markets, yen drop ahead of key Bank of Japan decision

Traders are now awaiting the release of a US retail sales report as well as inflation figures and central bank policy decisions in various countries over the next five days.

PAY ATTENTION: Share your outstanding story with our editors! Please reach us through info@corp.legit.ng!

While the Nasdaq chalked up yet another record high, Wall Street provided a tepid lead with the S&P 500 and Dow both down.

Tokyo, Shanghai, Sydney, Seoul and Wellington all dropped, though Hong Kong and Taipei edged up.

Several markets including Jakarta, Mumbai and Singapore were closed for holidays.

There was little reaction to May Chinese data showing retail sales beating expectations -- boosting hopes for an improvement in consumer activity -- but industrial production grew less than forecast and house prices fell further.

The euro faced further pressure from the dollar owing to concerns about the upcoming polls in France, which President Emmanuel Macron called after his party lost out to the far right National Rally (RN) in EU-wide elections last weekend.

Read also

UK's Labour pitches for power with 'wealth creation' pledge

The move has fanned fears about stability in Europe's second biggest economy, and observers said the country could be on course for a standoff with the bloc if extremists win.

Left-wing parties including the hard-left France Unbowed, the Socialist, Communist and Green parties said they had agreed -- despite long-running policy differences -- on an election alliance to fight RN and its leader Marine Le Pen.

The group has drawn up a manifesto that reverses a number of Macron's reforms over the past seven years, while pushing back against the European Union's fiscal pact governing debt and deficits.

"Uncertainty over the extent to which the far right RN party will have effective control of the next French parliament after July 7 will be an ongoing source of market angst in the coming two to three weeks," said Ray Attrill at National Australia Bank.

Worries about the election hammered Paris stocks last week, pushing them down more than two percent Friday, which weighed on other European bourses.

Read also

Asian stocks build on Wall St records after US inflation data

Key figures around 0230 GMT

Tokyo - Nikkei 225: DOWN 1.8 percent at 38,106.41 (break)

Hong Kong - Hang Seng Index: UP 0.9 percent at 18,097.45

Shanghai - Composite: DOWN 0.4 percent at 3,021.24

Euro/dollar: DOWN at $1.0700 from $1.0708 on Friday

Euro/pound: DOWN at 84.36 pence from 84.38 pence

Dollar/yen: UP at 157.49 yen from 157.37 yen

Pound/dollar: DOWN at $1.2685 from $1.2689

West Texas Intermediate: DOWN 0.2 percent at $78.29 per barrel

Brent North Sea Crude: DOWN 0.2 percent at $82.46 per barrel

New York - Dow Jones: DOWN 0.2 percent at 38,589.16 (close)

London - FTSE 100: DOWN 0.2 percent at 8,146.86 (close)

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.