Asian stock markets fell on Monday after President Joe Biden announced he would not run in the 2024 presidential race. This came after losses on Wall Street last Friday, as companies around the world dealt with problems caused by a major technological disruption.
Global market reactions
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Japan: The Nikkei 225 index fell 1.3% to 39,556.85.
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Hong Kong: The Hang Seng Index rose 0.8% to 17,548.33.
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Porcelain: The Shanghai Composite Index fell 0.7% to 2,961.41 after the People’s Bank of China cut its one-year lending prime rate (LPR) to 3.35% from 3.45%. The five-year LPR, used for mortgages, was also reduced from 3.95% to 3.85%. These changes are aimed at boosting the slowdown in the economy and addressing problems in the housing market.
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Australia: The S&P/ASX 200 fell 0.6% to 7,924.40.
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South Korea: The Kospi index fell 1.4% to 2,756.62.
US Market Overview
On Friday, the S&P 500 fell 0.7% to 5,505.00, marking its first week of losses in three 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.
Technological disruption and its impact
A major technology outage disrupted flights, banks and medical appointments around the world on Friday. Cybersecurity company CrowdStrike said the problem was due to a faulty update in Microsoft Windows and not a cyberattack. CrowdStrike shares fell 11.1%, while Microsoft shares fell 0.8%.
Expert perspective
Cybersecurity analyst Richard Stiennon called the incident a big mistake by CrowdStrike, but said that doesn’t mean there’s a bigger problem with the company or the industry. He believes markets and customers will eventually forgive them.
Cybersecurity Stock Movements
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Strike crowd: Despite a slight recovery during the day, it still had its worst performance since 2022.
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Rival companies: Shares of other cybersecurity companies rose: SentinelOne rose 7.8% and Palo Alto Networks rose 2.2%.
Effects of the airline industry
The disruption caused long delays at airports around the world. While U.S. airline stocks initially fell, they quickly recovered. United Airlines gained 3.3%, Delta Air Lines rose 1.2% and American Airlines Group saw a small drop of 0.4%.
Other market movements
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Bond market: The yield on the 10-year Treasury bond rose from 4.20% to 4.23%.
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Oil prices: U.S. benchmark crude oil rose 34 cents to $78.98 a barrel. Brent crude rose 41 cents to $83.04 a barrel.
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Currency exchange: The US dollar strengthened to 157.51 Japanese yen from 157.42 yen. The euro rose to $1.0892 from $1.0886.
Also read: Stocks fall as Microsoft outage hits major companies’ operations: market update