Asian Shares Follow Wall Street Lower As Risk Aversion Mounts

(RTTNews) - Asian stocks followed Wall Street lower on Monday as lingering trade tensions along with renewed uncertainty over U.S. monetary policy and ongoing heavy selling in the precious metals space spurred risk aversion.

Investors also looked ahead to the release of key U.S. jobs data as well as central bank decisions in Australia, Europe and London for direction.

Precious metals including gold and silver continued to plunge during Asian trading hours, with gold falling over 5 percent and silver declining nearly 8 percent following last week's dollar-fueled collapse.

Oil prices fell nearly 5 percent after the U.S. and Iran reportedly informed each other that they are ready to conduct negotiations on an agreement to end tensions between them.

Chinese and Hong Kong markets tumbled as beleaguered property developer China Vanke warned of a 11.8 billion net loss for 2025 and electric vehicle giant BYD reported a 30.1 percent year-on-year fall in vehicle sales for January.

China's Shanghai Composite index slumped 2.48 percent to 4,015.75 while Hong Kong's Hang Seng index plummeted 2.23 percent to 26,775.57. Both China Vanke and BYD fell more than 4 percent in Shanghai.

On the data front, China's official manufacturing purchasing managers' index came in well below forecasts at 49.3 and the non-manufacturing PMI fell back into contractionary territory, while a private gauge of China's manufacturing sector showed Chinese factories continued to expand activity in January.

Japanese markets joined a global sell-off as technology stocks lost ground on renewed concerns about the sustainability of AI investments. Investors also braced for the Feb. 8 snap lower house election.

The Nikkei average ended down 1.25 percent at 52,655.18, reversing early gains after Prime Minister Sanae Takaichi said that a weak yen could be a major opportunity for export industries. The broader Topix index settled 0.85 percent lower at 3,536.13. SoftBank Group tumbled 3.8 percent, Advantest lost 4.7 percent, Disco Corp plummeted 5.9 percent and Lasertec nosedived 14 percent.

Investors ignored the results of a private-sector survey that showed Japan's manufacturing activity grew at the fastest pace in about three and a half years in January.

Seoul stocks nosedived after U.S. Trump's nomination of Kevin Warsh as the next Federal Reserve chair led to a sharp decline in gold and silver prices.

The Kospi average plunged 5.26 percent to 4,949.67, snapping a four-session winning streak. Earlier in the day, the Korea Exchange (KRX) issued a sell-side circuit breaker for 5 minutes around noon. Hyundai Motor, Samsung Electronics and SK Hynix fell 4-9 percent.

Australian markets closed lower, with the benchmark S&P/ASX 200 falling 1.02 percent to 8,778.60, dragged down by financials and material stocks amid rate hike concerns and uncertainty over rare-earth pricing.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index finished marginally lower at 13,412.44.

U.S. stocks ended lower on Friday while the dollar index climbed and Treasury yields surged after President Trump nominated Kevin Warsh for Fed Chair and data showed producer prices increased by the most in five months in December amid some pass-through from import tariffs, prompting traders to price in hawkish shift in U.S. monetary policy.

Warsh is widely viewed as more skeptical of loose monetary policy and has previously criticized the Fed for underestimating inflation risks.

Trump's threat to impose tariffs on Canada planes and nations selling oil to Cuba also weighed on markets. The tech-heavy Nasdaq Composite shed 0.9 percent, while the Dow and the S&P 500 both slid by 0.4 percent.