Asian stock markets are weak, and tension in the Middle East continues

As risk sentiment weakened due to concerns about the Israel-Hamas conflict, most Asian stock markets declined on Monday. Japan's Nikkei index led the decline due to tension before key inflation data was released.

As Israel prepares to launch a ground attack on the Gaza Strip, the market is still worried that the Israeli-Hamas conflict will spread to the Middle East. However, US Secretary of State Anthony Blinken said that Arab countries do not want the conflict to spread.

Despite this, risk appetite remains weak, and is also pressured by concerns about rising US interest rates, as last week's inflation data exceeded expectations.

Japan's Nikkei index performed the worst amid a return in profits and a sharp decline in the tech industry.

Last week, the Bank of Japan's policy was looser, and the relatively strong performance of Japanese companies attracted a large number of foreign buyers and boosted the index.

However, worsening risk appetite has caused investors to lock in recent profits, and technology stocks have suffered maximum sell-off, as the market is still worried that interest rates in the US will rise.

Investors are also cautious about Japan ahead of September's key inflation data to be released later this week. If there are signs that inflation continues to rise, this may give the Bank of Japan an impetus to strengthen its policies.

The entire Asian market has declined. South Korea's KOSPI index fell 1%, and Australia's ASX 200 index fell 0.2%.

Indonesia's Nifuit 50 futures forecast a positive opening, especially after last week showed consumer inflation moderated in September. India's wholesale inflation data will be released later on Monday.

The Chinese stock market remains stable in terms of GDP and interest rate decisions.

China's Shanghai Shenzhen China Securities 300 Index and Shanghai Composite Index fell 0.6% and 0.4%, respectively, while Hong Kong's Hang Seng Index fell 0.1%.

Market sentiment towards China remains cautious ahead of the release of critical third-quarter GDP data. The data is expected to show continued weakness in economic growth.

The People's Bank of China will also determine its key loan benchmark interest rate later this week. Although the People's Bank of China has kept the interest rate on medium-term loans unchanged, it looks likely to change.

Despite the lifting of anti-COVID measures, state media said on Monday that the People's Bank of China is still planning to introduce more interest rate cuts this year because despite the lifting of anti-COVID measures, the business activity data released in early October is also pessimistic about the outlook for Asia's largest economy.

Source: Investing.com