Asian Shares Drift Lower After US Credit Rating Downgrade

(RTTNews) - Asian stocks ended lower on Monday as Moody's downgrade of the U.S. credit rating reinforced Wall Street's growing worries over the U.S. sovereign bond market.

Moody's slashed the credit rating of the U.S. by a notch to Aa1 from the highest triple-A rating, citing the government's massive budget deficit and high interest rates.

The U.S. dollar dipped while the yield on the 10-year U.S. Treasury rose to 4.52 percent from 4.44 percent on Friday amid renewed trade tensions.

U.S. Treasury Secretary Scott Bessent said in television interviews on Sunday that President Donald Trump is employing "strategic uncertainty" as a negotiating tactic in his trade talks and that tariffs will be imposed at the rate he threatened last month if countries do not negotiate in "good faith" on deals.

Gold prices rose about 1 percent in Asian trade due to trade and U.S. debt concerns. Oil declined on demand concerns after official data showed a slowdown in the pace of China's industrial output and retail sales.

Chinese markets ended little changed as mixed economic readings highlighted a fragile recovery. Industrial output held up in April but retail sales and investment disappointed as firms and households turn more cautious due to the trade war, official data revealed.

China's Shanghai Composite index finished marginally higher at 3,367.58 while Hong Kong's Hang Seng index ended with a negative bias at 23,332.72.

Alibaba Group Holding shares fell 3.4 percent after reports that U.S. officials are scrutinizing a potential Apple-Alibaba deal to integrate AI features into iPhones in China.

Japanese markets fell notably as the yen strengthened on expectations of a Bank of Japan rate hike.

Trade tension also weighed as China announced it would impose up to 75 percent of anti-dumping duties on plastic imports from the United States, European Union, Taiwan and Japan.

The Nikkei average dropped 0.68 percent to 37,498.63 while the broader Topix index settled marginally lower at 2,738.39, extending losses for a second straight session.

Seoul stocks closed markedly lower, with the Kospi average falling 0.89 percent to 2,603.42.

Tech and auto shares paced the decliners, with Samsung Electronics falling 1.8 percent, SK Hynix declining 2.5 percent and Hyundai Motor giving up 1.4 percent.

Australian markets ended lower to snap an eight-session winning streak, dragged down by banks and miners ahead of the Reserve Bank of Australia's interest-rate decision this week.

The benchmark S&P/ASX 200 fell 0.58 percent to 8,295.10 while the broader All Ordinaries index closed 0.64 percent lower at 8,524.80.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index tumbled 1.23 percent to 12,629.07.

U.S. stocks ended higher on Friday after closing mixed for two straight sessions. Traders largely shrugged off data that showed U.S. consumer sentiment unexpectedly fell to the second-lowest level on record and inflation expectations climbed to multi-decade highs.

The narrower Dow climbed 0.8 percent and gained 3.4 percent for the week on optimism over easing U.S.-China trade tensions.

The S&P 500 gained 0.7 percent, extending its winning streak to five sessions and posting a strong weekly gain of over 5 percent.

The tech-heavy Nasdaq Composite added half a percent and surged 7.2 percent for the week.