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Shares fell in most Asian markets on Monday as interest rate hikes and a slowing Chinese economy weighed on investor sentiment.
Oil prices were higher and U.S. futures fell following sharp declines on Wall Street last week.
Benchmarks declined across the region. Jakarta's benchmark fell 4%.
China reported its exports rose 3.7% over a year earlier in April to $273.6 billion, down sharply from March's 15.7% growth, as global demand weakened. That added to pressure on the world's second-largest economy after Shanghai and other industrial cities were shut down to fight virus outbreaks.
Imports crept up 0.7% in April to $222.5 billion, in line with the previous month's sub-1% growth.
Companies and investors worry the ruling Communist Party's "zero-COVID" strategy that temporarily closed most businesses in Shanghai and other industrial centers is disrupting global trade and activity in autos, electronics and other industries.
But a slowing global economy is also taking a toll.
"The blame rests partly with China's COVID-19 outbreak, which has led to manpower shortages and bottlenecks in the logistics sector. But the extent of these disruptions shouldn't be overplayed," Julian Evans-Pritchard said in a commentary. "Instead, the drop in exports seems to mostly reflect softer demand."
The Shanghai Composite was little changed, falling nearly 0.1% to 2,999.77. Markets were closed in Hong Kong for a national holiday.
Japan's benchmark Nikkei 225 lost 2.5% to finish at 26,319.34. South Korea's Kospi dipped 1.3% to 2,611.28. Australia's S&P/ASX 200 dropped 1.2% to 7,120.60. The benchmark in Jakarta, Indonesia, lost 4.4% as markets reopened after the Eid al-Fitr holiday last week.
Investors are watching for the outcome of the presidential election in the Philippines, although it remains unclear how economic policies might change. The son of long-ago overthrown Philippine dictator Ferdinand Marcos is the top contender in Monday's vote, based on most voter-preference surveys.
Apart from concerns about inflation and coronavirus restrictions, the war in Ukraine is still a major cause for uncertainty. More than 60 people were feared dead after a Russian bomb flattened a school being used as a shelter, Ukrainian officials said. Moscow's forces pressed their attack on defenders inside Mariupol's steel plant in an apparent race to capture the city ahead of Russia's Victory Day holiday Monday.
"Russia's Victory Day today will also bring geopolitical risks back into the limelight as well. President Putin is likely to reiterate his justification for the Ukraine war but markets may be watching for any further efforts to ramp-up military operations to secure the war," said Yeap Jun Rong, market strategist at IG in Singapore.
Shares closed lower on Wall Street on Friday with the market's fifth straight weekly decline. Worries are simmering the that despite strong U.S. employment trends, the Federal Reserve's efforts to tame inflation by raising interest rates may send the American economy into a recession.
The increase Wednesday in the Fed's key short-term rate raised it by 0.5 percentage points to a range of 0.75% to 1%, the highest level since the pandemic struck two years ago.
The S&P 500 fell 0.6% to 4,123.34. The Dow dropped 0.3% to 32,899.37. The Nasdaq gave up 1.4% to 12,144.66. Smaller companies fell more than the broader market. The Russel 2000 slid 1.7% to 1,839.56.
The Fed is hoping to raise rates and slow the economy enough to snuff out the highest inflation in four decades, but it risks choking off growth if it goes too far or too quickly. Fed chair Jerome Powell has reassured investors by saying the central bank was not "actively considering" an even bigger jump of 0.75 percentage points at its next meeting.
In energy trading, benchmark U.S. crude fell 36 cents to $109.41 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the basis for pricing oil for international trading, edged down 12 cents to $112.27 a barrel.
In currency trading, the U.S. dollar rose to 131.13 Japanese yen from 130.55 yen. The euro cost $1.0509, down from $1.0545.
AP Business Writer Joe McDonald in Beijing contributed.
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Elsewhere, the offshore yuan depreciated past 6.75 per dollar (currently trading at 6.76165), hitting some fresh yearly lows. Analysts are cutting their forecast for China’s full-year GDP growth to reflect their current economic situation, adding even more downward pressure to the yuan.
Yuan pressure is based on dividend outflow expectation.
Philippines politics is a horror show, so moving from one leader to the next won't alter much beyond who gets rich and who gets shot.
If nobody bumps off Putin, the Ukraine conflict will last until Russia runs out of conscripts or America runs out of bullets. So just pencil that in as permanent for now. That ensures rampant global inflation that interest rates won't even slow, shortages, food export restrictions, famine and political instability. We are about to see just how dependent our civilisation was on globalised trade, and it won't be pretty. Putin's invasion is also the final nail in the coffin for any attempt to slow climate change, so now is a good time to look for the most climate-secure bolthole you can find.
Re: China -The blame rests partly with China's COVID-19 outbreak.
No, the blame rests almost wholly on China's bizarre and unsustainable RESPONSE to the Covid outbreak. It is only a matter of time before more Chinese cities go into lockdown. Amused that it is called 'temporary'. Maybe permanent is just a synonym for 'quasi-temporary'. The effect on the global economy of this bizarre CCP nuttery cannot be underestimated. Expect global markets to tank. But don't worry. I'm sure financial wizards will get rich shorting the future of humanity.
Japan quasi-remains within the quasi-pandemic with quasi-closed borders and quasi-restrictions. It doesn't want to go the full China, but it can't bring itself to make like the West, which has simply got on with things. It also plans a quasi-end to Russian energy, keeping it's Russian investments safe. The Japanese Diet building should have an arthouse installation - a row of chairs that look like a fence, for members to sit on.
Yuan pressure is based on dividend outflow
Theseus is that the Yuan is being manipulated intentionally? For investors to be able to realize and shelter dividends from CITs or DATs, perhaps? Even if so, this at a time of capital outflows? When international investors have been pulling money out of the country this quarter and the last on a previously unseen scale, while hesitating to re-invest new monies? Something else going on that hasn't made analytics?
Dividend outflow from local Chinese Companies registered as paying non-CNY dividends... Kinda hard to ignore that.
Right now, I would consider China as being a less that equitable place to invest money, mostly upon the uncertainty towards Political actions that may result in a squassation of foreign funds, at regardless what consequence it would have towards the current Government - which has no cares towards what the rest of the World thinks.
Consider the threat that China has... to stop all exports of everything. And how will it impact them ... they're already doing it.... don't you see ? This is the start of the Xi plan, and it starts with bringing all at home into submission by suffrage and desperation , controlled by the military presence that has already, as an example, been deployed upon the streets within the City of Shanghai.
If you can, then get out Now, from China.
Pretty much what we have already seen, and are seeing now, without additional party drama? Check.
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