Equities Fell, Crude Oil Dipped on Inflation and Economic Slowdown Concerns

Asian equities fell on Monday on high inflation, monetary tightening and the prospect of an economic slowdown.

Shares in Mainland China, Hong Kong, South Korea and Japan dipped while the MSCI Asian Index ex Japan dipped by 2.91%.

The yuan weakened as the data showed COVID-19 lockdowns in China taking a toll on the economy with slowest export girth since 2020 and shaking imports. Premier Li Keqiang warned about the employment situation as Beijing and Shanghai tightened virus curbs.

Treasury yields dipped but remained in sight of levels last seen in 2018. Inflation data this week from the U.S. and elsewhere could drive bond-market swings.

Volatility remains the watchword in global markets on growth, inflation and war risks.

Later Monday, President Vladimir Putin is due to speak at Russia’s May 9 Victory Day parade, which marks the anniversary of Nazi Germany’s surrender in 1945. He may indicate his next steps for the Ukraine invasion.

On Russia-Ukraine war developments, the Group of Seven most-industrialized countries pledged to ban the import of Russian oil. The European Union is working on a similar plan but Hungary remains a holdout and the bloc’s talks are set to continue.

The short-term outlook for stocks “is still messy and there may be more downside as markets worry about a significant economic slowdown or ‘hard landing’ and aggressive interest-rate hikes,” Diana Mousina, senior economist at AMP Investments, wrote in a note.

Crude oil dipped with the WTI trading around $109 a barrel and the Brent trading around $112 a barrel.