Asian shares were mostly lower on Monday after President Joe Biden withdrew from the 2024 race. The bleak start to the week followed losses on Wall Street on Friday as companies around the world scrambled to deal with disruptions from a massive malfunction in the technology.
US futures were little changed and oil prices rose.
Biden announced his withdraw from the 2024 presidential race on Sunday and endorsed Vice President Kamala Harris to run against former President Donald Trump, further increasing uncertainty about the future of the world’s largest economy.
Japan’s benchmark Nikkei 225 fell 1.3% to 39,556.85 in morning trading.
Hong Kong’s Hang Seng rose 0.8% to 17,548.33 and the Shanghai Composite index fell 0.7% to 2,961.41 after the People’s Bank of China unexpectedly cut the one-year benchmark loan prime rate (LPR), the standard reference for most corporate loans, to 3.35% from 3.45%.
The People’s Bank of China has cut its five-year mortgage rate from 3.95% to 3.85%, hoping to boost slowing growth and break the ongoing housing recession.
This came after the government recently reported that the economy was growing at a pace. slower than predicted 4.7% annual pace in the second quarter.
“Chinese commercial banks’ net interest margins are already at record lows and non-performing loans are growing rapidly; rate cuts are likely to increase pressure on Chinese banks,” Lynn Song of ING Economics said in a commentary.
Elsewhere in Asia, the Australian S&P/ASX 200 fell 0.6% to 7,924.40. South Korea’s Kospi lost 1.4% to 2,756.62.
Friday is the S&The P 500 fell 0.7% to close at 5,505.00, marking its first losing week in three years and its worst since April. The Dow Jones Industrial Average fell 0.9% to 40,287.53, while the Nasdaq Composite fell 0.8% to 17,726.94.
Friday’s moves came as a major disruption disturbed flights, banks and even doctor appointments around the world. Cybersecurity firm CrowdStrike said the issue believed to be behind the outage was not a security incident or cyberattack and that it had implemented a fix. The company said the problem was a faulty update sent to computers running Microsoft Windows.
CrowdStrike’s Shares fell 11.1%, while Microsoft lost 0.8%.
Richard Stiennon, a cybersecurity industry analyst, called it a historic mistake by CrowdStrike, but he also said he didn’t think it highlighted a larger problem within the cybersecurity industry or within CrowdStrike as a company.
“We all know you can point at something with a fat finger, make a typo, you know, but we don’t know the technical details yet of how it caused the bluescreen of death for users,” he said.
“The markets will forgive them, the customers will forgive them, and this will blow over,” he said.
Crowdstrike stock pared its losses somewhat during the day, but still posted its worst performance since 2022. Shares of rival cybersecurity companies rose, including a 7.8% jump for SentinelOne and a 2.2% gain for Palo Alto Networks.
The outage affected check-in procedures at airports around the world, leading to long lines of frustrated flyers. That initially caused U.S. airlines to slash their stocks, but they quickly recovered their losses. United Airlines, for example, posted a 3.3% gain. The company said many travelers could experience delays and issued a waiver to make it easier to change travel plans.
American Airlines Group fell 0.4% and Delta Air Lines rose 1.2%.
In the bond market, yields rose. The yield on the 10-year Treasury rose to 4.23% from 4.20% on Thursday night.
In other trading, benchmark U.S. crude rose 34 cents to $78.98 a barrel in electronic trading on the New York Mercantile Exchange on Monday morning.
Brent crude, the international standard, rose 41 cents to $83.04 a barrel.
The US dollar rose to 157.51 Japanese yen from 157.42 yen. The euro rose to 1.0892 dollars from 1.0886.