Markets in Asia in red as sentiment remained under pressure

Markets in Asia extended losses on Wednesday as sentiment remained under pressure due to increasing concerns over Italy’s political turmoil and its implications for the rest of the bloc.

In Japan, the Nikkei 225 closed in red territory at 22,022.50 points, down 1.50 percent, with banking and metals pushing lower. The broader Topix dropped 1.46 percent.

South Korea’s Kospi benchmark slipped 1.96 percent, with technology names such as Samsung Electronics and Posco falling more than one and a half percent in the day.

The S&P/ASX 200 index eased 0.48 percent, with financials leading decliners but safe-haven assets such as gold offering some support.

Hong Kong's Hang Seng Index was down 1.68 percent, while mainland Shanghai composite ended 2.53 percent lower and the Shenzhen posted a 2.37 percent loss.

Market sentiment continued to be dominated by prospects of fresh elections in Italy, with anti-EU anti-establishment parties gaining popularity among society, according to opinion polls.

Earlier this week, the President appointed a former IMF economists as Prime Minister. A measure that was mainly designed to block the nomination of an eurosceptic politician.

The instability in Europe’s third largest economy is reflected in rising bond yields, with Italy’s two-year bond yield adding more than 180 basis points in the last session.

In the US, Wall Street indexes began on the downside this week. The Dow Jones industrial average was down 1.58 percent, with a massive sell off weighing on the benchmark.

In other news, the Trump administration confirmed on Tuesday that it will release a list of nearly $50 billion worth of Chinese goods that will be subject to a 25 percent tariff by June 15. The decision comes after intense negotiations between Washington and Beijing last week.

Economic calendar:

Europe: Germany’s unemployment change and rate will be released at 08:00 GMT, followed by the latest reading on consumer prices.

United States: ADP nonfarm employment change for May will be out at 12:15 GMT. A fresh reading on the Q1 GDP is due fifteen minutes later, along with the goods trade balance for April. The Federal Reserve will unveil its Beige Book at 18:00 GMT.

Asia: Japan’s industrial production figures for April are due at 23:50 GMT.

FortFS