Asian markets drop as Biden drops out of White House race

Asian markets drop as Biden drops out of White House race

Joe Biden gave his backing to Vice President Kamala Harris after announcing his decision to drop out of November's race for the White House
Joe Biden gave his backing to Vice President Kamala Harris after announcing his decision to drop out of November's race for the White House. Photo: JEFF KOWALSKY / AFP
Source: AFP

Asian markets fell Monday as Joe Biden's decision to drop out of the US presidential race fuelled fresh uncertainty, while traders appeared to be unmoved by China's decision to cut interest rates in a bid to boost the country's stuttering economy.

After last weekend's assassination attempt on Donald Trump -- and the following Republican convention -- boosted bets he would win November's election, investors were trying to work out the ramifications of the news out of the White House.

Biden on Sunday gave in to weeks of calls for him to step aside in the wake of a poor debate performance that raised more questions about his health, and endorsed Vice President Kamala Harris to succeed him.

The news has left traders wondering who will go head to head with Trump, whose expected victory had lifted equities and the dollar on expectations for tax cuts and deregulation.

Read also

Markets track Wall St loss with eyes on US race, China disappoints

Analysts said markets would likely be volatile in the near term.

"While market instinct will be to say that the news adds a degree of uncertainty to the outcome of the 5 November election that wasn't present last week, it will be many weeks... before anyone can reasonably determine if the race for the White House is significantly narrower than looked to be case previously," said National Australia Bank's Ray Attrill.

"In short, there'll be more noise than signal on US politics for markets to contend with in the coming few weeks at least."

Stocks in Asia fell Monday following losses on Wall Street and Europe, where trade was dominated by a crash in global computer systems -- the result of a faulty update to an antivirus program -- that hit airports, airlines, trains, banks, shops and even doctors' appointments.

Read also

China's leaders vow to fight 'risks' plaguing economy

Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei and Manila all fell, though Jakarta and Wellington edged up.

The latest developments out of Washington have overshadowed optimism that the Federal Reserve will cut interest rates as soon as September and possibly again before January.

There was little reaction to news that China's central bank had cut borrowing costs as leaders look to kickstart the world's number two economy, which has been hammered by a huge property crisis and weak consumer demand.

The Bank of China lowered the one-year and five-year loan prime rates in a bid to encourage commercial banks to grant more credit.

The decision comes after a closely watched meeting last week of leaders concluded with few major announcements bar pledges to tackle "risks" in the economy.

However, officials pledged Friday to help ease debt pressure on local governments through reforms to the tax system.

Worries about local government finances have been growing for years and have been made worse by the a chronic real estate debt crisis and in April ratings agency Fitch lowered its outlook on China's sovereign credit.

Read also

Asian markets drop with Wall St as Biden sparks fresh chip fears

Key figures around 0230 GMT

Tokyo - Nikkei 225: DOWN 1.2 percent at 39,593.81 (break)

Hong Kong - Hang Seng Index: DOWN 0.4 percent at 17,354.26

Shanghai - Composite: DOWN 0.9 percent at 2,954.66

Euro/dollar: UP at $1.0887 from $1.0885 on Friday

Pound/dollar: UP at $1.2916 from $1.2914

Dollar/yen: UP at 157.59 from 157.47 yen

Euro/pound: UP at 84.30 pence at 84.27 pence

West Texas Intermediate: UP 0.5 percent at $80.49 per barrel

Brent North Sea Crude: UP 0.3 percent at $82.86 per barrel

New York - Dow: DOWN 0.9 percent at 40,287.53 (close)

London - FTSE 100: DOWN 0.6 percent at 8,155.72 (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.