Asian shares slide after Wall Street posts its worst session in 3 weeks

Shares fell Monday in Asia as China reported investment fell in November in the latest signal that demand in the world's second largest economy remains weak. The retreat followed a dismal end to last week, when declines for superstar artificial-intelligence stocks knocked Wall Street off its record heights  Tokyo's Nikkei 225 index shed 1.5 per cent to 50,092.10, as investors wait to see if the Bank of Japan will raise its benchmark interest rate as expected this week.

The BOJ's quarterly tankan survey of big manufacturers, released Monday, showed a slight improvement in sentiment among such businesses. The measure of those expressing optimism rose to 15 from 14 in the last quarter, the highest level in four years, the central bank said.

 

The index shows the percentage of companies reporting positive conditions minus the percentage reporting unfavourable ones. While the overall survey showed improvement, forecasts for the next quarter were less positive.

Japan's economy contracted at a 2.3 per cent annual pace in the July-September quarter, the first such decline in six quarters. An agreement between Japan and the US over the level of President Donald Trump's higher tariffs, limiting baseline import duties to 15 per cent, has helped to reduce uncertainty for big automakers and electronics companies.

Analysts said the stronger results may sway the BOJ toward pressing ahead with a 0.25 percentage point rate hike that will take the key rate to 0.75 per cent.

The Kospi in South Korea dropped 1.2 per cent, to 4,117.68.

In Hong Kong, the Hang Seng declined 0.7 per cent to 25,786.45. The Shanghai Composite index edged 0.1 per cent higher, however, to 3,892.45.

China reported Monday that investment in fixed assets such as factory equipment and other infrastructure fell 2.6 per cent in November from a year earlier, implying that such investments dropped 11.1 per cent year-on-year in the first 11 months of the year.

Retail sales rose 4 per cent in January-November from a year earlier, while factory output climbed 4.8 per cent, the government said.

The latest data followed a high-level meeting of China's Communist Party leadership last week that yielded no major policy shifts, and a pledge to continue to try to boost consumer spending and investment needed to drive higher domestic demand.

Policy support should help drive a partial recovery in the coming months, but this probably won't prevent China's growth from remaining weak across 2026 as a whole, Zichun Huang of Capital Economics said in a commentary.

Elsewhere in the region, Australia's S&P/ASX 200 slipped 0.7 per cent to 8,640.60 and Taiwan's benchmark lost 1.1 per cent.

The futures for the S&P 500 and the Dow Jones Industrial Average were up 0.3 per cent.

On Friday, the S&P 500 fell 1.1 per cent from its all-time high for its worst day in three weeks, closing at 6,827.41. The weakness for tech stocks yanked the Nasdaq composite down by a market-leading 1.7 per cent, to 23,195.17.

The Dow gave back 0.5 per cent to 48,458.05.

AI heavyweight Broadcom dragged the market lower and tumbled 11.4 per cent even though the chip company reported a stronger profit for the latest quarter than analysts expected. Analysts called the performance solid, and CEO Hock Tan said strong 74 per cent growth in AI semiconductor revenue helped lead the way.

The drop added to worries about the AI boom that flared a day before, when Oracle plunged nearly 11 per cent despite likewise reporting a bigger profit for the latest quarter than analysts expected.

Chip maker Nvidia fell 3.3 per cent, while Oracle fell another 4.5 per cent.

Stocks of companies that depend on spending by US consumers were relatively strong Friday, as two out of every five stocks within the S&P 500 rose. Oil prices eased this week, which could help ease people's bills.

In other dealings early Monday, US benchmark crude oil gained 30 cents to $57.74 per barrel. Brent crude, the international standard, rose 29 cents to $61.41 per barrel.

The US dollar slipped to 155.37 Japanese yen from 155.75 yen late Friday. The euro was unchanged at $1.1739.