Asian shares declined after a report indicated that US manufacturing contracted in May, highlighting signs of economic slowdown.
India’s Sensex led the regional losses, plunging 4.1% to 73,496.24, as early vote counts from the country’s national election showed a lower-than-expected seat count for incumbent Prime Minister Narendra Modi’s party. However, his National Democratic Alliance was still comfortably leading its closest rival.
Japan’s Nikkei 225 index dropped 0.2% to 38,837.46, while Seoul’s Kospi fell 0.8% to 2,660.69.
Hong Kong’s Hang Seng was the exception, rising 0.5% to 18,494.28, whereas the Shanghai Composite index slipped 0.1% to 3,076.96.
Australia’s S&P/ASX 200 decreased 0.3% to 7,740.80, and Taiwan’s Taiex declined 0.8%.
On Monday, US stocks had a mixed finish.
The S&P 500 inched up 0.1% to 5,283.40, despite most stocks in the index falling. The Dow Jones Industrial Average dropped 0.3% to 38,571.03, while the Nasdaq Composite gained 0.6% to 16,828.67.
Australian and New Zealand bonds rallied, following gains in Treasuries after weak US data increased expectations for a Federal Reserve rate cut.
Treasuries rose across the curve on Monday after data showed factory activity contracting at a faster rate with output near stagnation, leading 10-year yields to drop 11 basis points to 4.39%. Australia’s equivalent yield fell six basis points in early Tuesday trading, and New Zealand’s slipped seven basis points.
Asian currencies, including the Malaysian ringgit and South Korean won, strengthened.
