Investing.com– Most Asian stocks fell sharply on Monday as risk appetite was hit by Iran’s attack on Israel, while lingering concerns about higher U.S. interest rates for longer also weighed long.
Chinese stocks were the only outperformers of the day, rebounding from more than a month’s lows as Beijing promised more support.
Regional markets took a weak lead from Wall Street, which fell on Friday amid growing anxiety over a rate cut and weak earnings from major banks. But U.S. stock index futures rose slightly in Asian trading.
Asian stocks sink amid Iran-Israel tensions and interest rate concerns
Japan was among the day’s worst-performing stocks, falling 1.2% as investors continued to lock in profits near recent record highs.
Data showing a recovery through February, indicating an improvement in capital spending, did little to support sentiment. March data, expected later this week, represents a key point of focus for Japanese markets.
South Korea fell 0.8% as March trade data showed little gain, while it fell.
Australia lost 0.5%, although surging metal prices supported some mining stocks.
Futures for the Indian index indicated a negative open after the index slumped from record highs on Friday.
Indian inflation data will also be available by the end of the week.
Regional markets are grappling with weak risk appetite after Iran’s attack on Israel over the weekend fueled concerns of a wider war in the Middle East. But the attack’s impact was limited and Tehran also signaled the end of its offensive against Israel.
Asian stocks also took a weak lead after Wall Street closed on Friday. US stock indexes had fallen after a string of weak earnings by major banking stocks.
Hotter-than-expected inflation data released last week also saw markets largely scale back expectations for early interest rate cuts.
Chinese stocks rebound thanks to government support
Both China and China indexes rose 1.8% and 1.2% respectively, rebounding from month-and-a-half lows hit last week.
Sentiment towards local stocks was also supported by local media reports that the government promised more support to local capital markets.
Major government-backed state funds were also seen buying shares of heavyweight Chinese banks, which was a key point of support for Chinese stock indexes.
Chinese markets were recovering from a string of weak economic data last week, as March data missed expectations.
Hong Kong stocks still reflect negative sentiment towards China. It fell 0.7% on Monday, weighed down by losses in mainland Chinese stocks.