Following the weak economic data and sharp falls seen in US and European markets last Friday, Asian markets started this week on a weak note, the MSCI Asia-Pacific Index falling 2.1 percent on Monday.
Japan’s Topix in particular fell 1.9 percent to its lowest close since December 1983. It is now in bear market territory having fallen more than 20 percent from its high in March.
US stocks managed to avoid losses despite an unexpectedly weak report on factory orders on Monday. US factory orders fell 0.6 percent in April after having fallen 2.1 percent in March. Excluding transportation equipment, factory orders fell 1.1 percent in April. Durable goods orders were unchanged in April but orders for non-defense capital goods excluding aircraft decreased 2.1 percent.
There was also another sign of slower growth in China on Monday. The National Bureau of Statistics and China Federation of Logistics and Purchasing reported that the PMI for the non-manufacturing sector fell to 55.2 in May from 56.1 in April.