Asian stocks fall after worst week on Wall Street; Biden withdraws from 2024 race

Asian stocks were mostly lower on Monday after President Joe Biden dropped out of the 2024 presidential race. The downbeat start to the week followed losses on Wall Street on Friday as companies around the world scrambled to contain disruptions caused by a massive pandemic. technological failure.

U.S. futures were little changed and oil prices rose.

Biden announced his withdrawal from the 2024 presidential race Sunday and endorsed Vice President Kamala Harris to take on former President Donald Trump, adding to uncertainties about the future of the world's largest economy.

Japan's benchmark Nikkei 225 index fell 1.3% in morning trading to 39,556.85 points.

Hong Kong's Hang Seng Index gained 0.8% to 17,548.33 and the Shanghai Composite Index fell 0.7% to 2,961.41 after China's central bank unexpectedly cut its benchmark one-year lending prime rate, or LPR, which is the standard benchmark for most corporate loans, to 3.35% from 3.45%.

The People's Bank of China cut the five-year prime lending rate, a benchmark for mortgages, to 3.85 percent from 3.95 percent, in a bid to boost slowing growth and emerge from a prolonged property slump.

This comes after the government recently announced that the economy had grown at a slower than expected 4.7% annual rate in the second quarter.

Net interest margins at Chinese commercial banks are already at record lows and non-performing loans are rising rapidly; rate cuts will likely add to the pressure on Chinese banks, Lynn Song of ING Economics said in a commentary.

Elsewhere in Asia, Australia's S&P/ASX 200 index fell 0.6% to 7,924.40 points. South Korea's Kospi lost 1.4% to 2,756.62 points.

On Friday, the S&P 500 index fell 0.7% to 5,505.00, capping its first week of decline in three weeks and its worst since April. The Dow Jones Industrial Average fell 0.9% to 40,287.53, while the Nasdaq Composite dropped 0.8% to 17,726.94.

Friday's moves came as a major breakdown disturbed flights, banks and even doctor appointments anywhere in the world. Cybersecurity firm CrowdStrike said the issue believed to be causing the outage was not a security incident or cyberattack and that it had deployed a patch. The company said the problem was a faulty update sent to computers running Microsoft Windows.

Crowd strikes The stock fell 11.1%, while Microsoft lost 0.8%.

Cybersecurity industry analyst Richard Stiennon called the mistake a historic error on CrowdStrike's part, but he also said he didn't think it was indicative of a larger problem in the cybersecurity industry or in CrowdStrike as a company.

We all know that you can make a typo, make a typo, etc. — we don't yet know the technical details of how that caused the blue screen of death for users, he said.

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The markets will forgive them, the customers will forgive them, and it will all work out, he said.

Crowdstrikes shares pared some of their losses on the day, but still posted their worst performance since 2022. Shares of rival cybersecurity companies climbed, with SentinelOne up 7.8% and Palo Alto Networks up 2.2%.

The outage disrupted check-in procedures at airports around the world, causing long lines of frustrated passengers. The situation initially helped send U.S. airline stocks down, but they quickly pared their losses. United Airlines gained 3.3%, said many travelers could face 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 slightly. The yield on the 10-year Treasury note rose from 4.20% to 4.23% late Thursday.

In other trading Monday morning, benchmark U.S. crude oil gained 34 cents to $78.98 a barrel in electronic trading on the New York Mercantile Exchange.

Brent crude oil, the international benchmark, gained 41 cents to $83.04 a barrel.

The US dollar rose from 157.42 yen to 157.51 Japanese yen. The euro rose from 1.0886 to 1.0892 dollars.