Asian shares stumbled to near three-week lows on Monday amid fears of a global trade war, while the euro was shaky in currency markets due to worries that an anti-establishment alliance government could emerge from elections in Italy.
Investors fear the current momentum in the global economy could be lost if Trump starts a global trade war.
Asian markets were a sea of red with MSCI’s broadest index of Asia-Pacific shares outside Japan falls 0.8 percent to the lowest since mid-February. It lost more than 2 percent of its value last week.
Japan’s Nikkei fell 0.97 percent in afternoon trade, while the Topix index was down 1.08 percent. Across the Korean Strait, the Kospi was down 1.02 percent.
Chinese mainland markets fell as well, with the Shanghai Composite down 0.16 percent. The Shenzen composite wavered between gains and losses to trade up to 0.11 percent.
In Hong Kong, the Hang Seng index declined 1.13 percent. Meanwhile, down under, the benchmark ASX 200 fell 0.66 percent, with the heavily-weighted financial sub-index down 0.92.
Moreover, Australian banking names mostly fell. Shares of ANZ were down 0.81 percent, Commonwealth Bank declined 1.03 percent, Westpac was down 1.51 percent and the National Australia Bank declined 0.8 percent. Major mining stocks were lower too, with Fortescue lost 3.36 percent.
Italian Election, German Social Democrats
Italian voters delivered a hung parliament on Sunday, flocking to anti-establishment and far-right parties in record numbers and casting the euro zone's third-largest economy into a political gridlock that could take months to clear.
After a see-saw start, the common currency eased back to $1.2323 from a two-week high of $1.2365 as the euro-skeptic 5-Star Movement saw its support soar to become the largest single party, according to projections based on early vote-counting.
The euro still found support after Germany's Social Democrat party decisively backed the renewal of an alliance with Chancellor Angela Merkel's conservatives, allowing her to form a new government more than five months since the country's inconclusive election.
Global Trade War Threat
The session in Asia followed a mixed finish at Wall Street on Friday as investors remained focused on President Donald Trump'sannouncement last week that he would introduce tariffs on steel and aluminum imports.
The single currency also got a lift from safe-haven flows, as did the yen, with risk sentiment turning on fears of a trade war after U.S. President Donald Trump proposed tariffs on imported steel and aluminum.
The dollar fell for a fourth straight session to trade around 105.49 yen but was slightly above Friday's low of 105.23, a level not seen since November 2016.
The dollar index, which measures the greenback against a basket of currencies, was mostly unchanged.
Canada and Mexico have threatened retaliation, and the European Union said it would apply 25 percent tariffs on about $3.5 billion of imports from the United States if Trump carried out his threat.
China said on Sunday it did not want a trade war with the United States, but will defend its interests, warning that policies based on "mistaken assumptions" will damage bilateral relations.
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