Asian Markets Decline On Monday Following Global Technology Outage and Biden Exit From The 2024 US Elections

In today’s trading, Asian stocks fell broadly after President Joe Biden announced his exit from the 2024 race. The weak start to the week came on the heels of Wall Street losses on Friday as global businesses worked to manage disruption caused by a major technology outage.

On Sunday, Biden announced his withdrawal from the 2024 presidential race and endorsed Vice President Kamala Harris to challenge former President Donald Trump, increasing uncertainties about the future of the world’s largest economy. 

The People’s Bank of China lowered the five-year loan prime rate, a key benchmark for mortgages, from 3.95% to 3.85%, to stimulate sluggish growth and end a prolonged property downturn. 

This move followed the government’s announcement that the economy grew at a slower-than-expected annual rate of 4.7% in the second quarter. Lynn Song of ING Economics noted that Chinese commercial banks’ net interest margins are already at record lows, while non-performing loans have been increasing rapidly. She added that rate cuts are likely to further pressure Chinese banks. 

The Hang Seng index rose by 1.3% to 17,640.51m while the Shanghai Composite Index fell by 0.6% to 2,964.22. This movement came after China’s central bank unexpectedly reduced its one-year benchmark loan prime rate (LPR), the standard reference for most business loans, from 3.45% to 3.35%

In Tokyo, the Nikkei 225 fell by 1.2% to 39,599.00. South Korea’s Kospi also fell 1% to 2,767.62. The Bank of Japan (BOJ) released minutes from the Bond Market Group meetings held on July 9-10. The BoJ is expected to decide and announce the planned amount of JGB purchases for the next two years at the upcoming Monetary Policy meeting. 

In Australia, the S&P/ASX 200 declined by 0.6% to 7,926.30.