Major Asia-Pacific markets in Japan, Australia and Hong Kong opened the week lower as energy and technology stocks emerged as top drags across the region on Monday.
Hong Kong’s Hang Seng index fell 0.4% to 24,962.11 by lunch break on Monday. The Hang Seng Mainland Oil & Gas Index fell 2.5% by midday as oil prices hit seven-week low on oversupply concerns and demand worries following resurgent Covid-19 waves in Europe.
Japan announced record stimulus package
In Japan, benchmark Nikkei 225 index inched 0.1% by Monday afternoon despite the government announcing a record JPY56trn ($490bn) stimulus package last week to aid its Covid-19 recovery.
On Monday, Topix-17 Energy Resources sectoral index fell 2% and Topix-17 Electric Appliances & PRE Instrument sectoral index slipped 0.3%.
Oil and gas explorer INPEX was the top loser in Tokyo on Monday, down 4.6%. Automobile stocks were also weak on Monday as carmaker Nissan Motor and auto ancillary companies including NSK and Yokohama Rubber made the top 10 intraday losers list.
“Reduction of risk appetite”
Elsewhere, Australia’s S&P/ASX 200 index fell 0.5% on Monday as financials, tech and energy sector lost over 1% each.
S&P/ASX 200 Energy slipped 1.5% as Beach Energy declined over 4%, while Oil Search and Santos fell about 2% each by Monday afternoon. Meanwhile, all the “Big Four” banks trade in the red on Monday with Westpac Banking leading losses by falling over 2%.
“There's not just a single factor driving markets, but many, though they are mostly pointing the same way - a reduction of risk appetite,” said Robert Carnell, ING Asia-Pacific regional head of research, citing resurgent Covid-19 cases in Europe, earlier-than-expected US rates tapering, falling oil prices and geopolitical issues.