BANGKOK (AP) — Shares tumbled in Asia on Monday after Wall Street ended last week with a broad retreat, while Thailand’s market saw a moderate loss following a general election that appeared likely to keep the incumbent, junta-backed prime minister in power.
Japan’s Nikkei 225 stock index tumbled 3.2 percent to 20,930.27, while the Shanghai Composite index declined 1.1 percent to 3,072.06. The Hang Seng in Hong Kong lost 1.8 percent to 28,583.60 and South Korea’s Kospi declined 1.7 percent to 2,149.39. The S&P ASX 200 gave up 1.2 percent to 6,120.60.
Investors are awaiting China-U.S. trade talks that are due to resume Thursday in Beijing.
Thailand’s SET dropped 0.9 percent after a military-backed party won the most votes in the country’s first election since a 2014 coup after tilting the electoral system in its favor. The outcome is likely to add to nearly two decades of political instability in Thailand.
The preliminary results raise the likelihood that Prayut Chan-ocha, will stay on as prime minister with backing from a coalition.
“However, the transition to the new government may not be smooth,” Sian Fenner of Oxford Economics said in a commentary.
“It is unlikely that any party will win a clear majority and potential friction between political parties and the military could lead to economic activity being significantly disrupted,” Fenner said.
Shares also were lower across the rest of Southeast Asia and India’s Sensex fell 0.9 percent to 37,820.15.
Wall Street was roiled Friday by new signs that global economic growth is slowing. The jitters triggered a sell-off in stocks and sent bond yields sharply lower, flashing a possible recession warning.
The wave of selling knocked 460 points off the Dow Jones Industrial Average and gave the benchmark S&P 500 index its worst day since Jan. 3. The Russell 2000 index of smaller company stocks fell more than the rest of the market as traders offloaded risker assets.
The S&P 500 index dropped 1.9 percent to 2,800.71 and the Dow Jones Industrial Average gave up 1.8 percent to 25,502.32. The Nasdaq composite, which is heavily weighted with technology stocks, slid 2.5 percent to 7,642.67. The Russell 2000 lost 3.6 percent, to 1,505.92.
Worried investors shifted money into bonds, which sent yields much lower. The yield on the 10-year Treasury dropped to 2.43 percent from 2.54 percent late Thursday, a big move.
The slide in bond yields hurt bank stocks which, along with technology companies, accounted for much of the broad decline in stocks. The utilities sector was the only one to eke out a gain.
Factory production in the euro currency alliance fell at its steepest rate in about six years, according to surveys of manufacturers’ purchasing managers.
ENERGY: Energy futures continued their slide. Benchmark U.S. crude oil slid 51 cents to $58.53 per barrel in electronic trading on the New York Mercantile Exchange. It lost 1.6 percent to settle at $59.04 a barrel on Friday. Brent crude shed 48 cents to $66.55 per barrel. It fell 1.2 percent to close at $67.03 a barrel on Friday.
CURRENCIES: The dollar was lower against the Japanese yen, at 109.85 yen, down from 109.91 yen on Friday. The euro was little changed at $1.1301, down from $1.1303.
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