Morning Brief: Asian stocks slide as Korea tumbles; China manufacturing grows

Asian markets opened the week under heavy pressure as a sharp selloff in South Korean equities set the tone for the region, while investors weighed mixed signals from China’s manufacturing sector, steep losses in precious metals, sliding oil prices, and a major leadership development at Walt Disney.

Asian markets lead declines as South Korea tumbles

South Korean benchmarks led losses across Asia on Monday, with a sharp selloff in technology stocks triggering trading halts and dragging on regional sentiment.

The Kospi index fell more than 4%, while Kospi 200 futures dropped as much as 5%, prompting authorities to temporarily halt trading, according to an official note.

Index heavyweights SK Hynix and Samsung Electronics slid 6.66% and 5.55%, respectively.

The small-cap Kosdaq fell 4.45%.

Elsewhere in the region, Japan’s Nikkei 225 fell 1.03%, while the Topix added 0.59%.

Hong Kong’s Hang Seng Index declined 3.03%, and mainland China’s CSI 300 fell 1.7%.

Australia’s S&P/ASX 200 dropped 1%. The broader MSCI Asia Pacific Index fell more than 2%.

Currency markets reflected the risk-off tone.

The Korean won weakened sharply, while futures tied to major US benchmarks also fell in early Asian trading.

Dow Jones Industrial Average futures lost 0.7%, S&P 500 futures dipped 1.2%, and Nasdaq-100 futures shed 1.6%.

Bitcoin dropped below $80,000 for the first time since April and last traded around $76,700.

China manufacturing activity improves but confidence weakens

China’s factory activity gathered pace in January, according to a private survey released Monday, as manufacturers accelerated production and front-loaded shipments ahead of the extended Lunar New Year holiday.

The seasonally adjusted RatingDog China General Manufacturing PMI, compiled by S&P Global, rose to 50.3 in January from 50.1 the previous month, matching analysts’ expectations in a Reuters poll.

A reading above 50 indicates expansion.

The result marked the strongest level since October, when the index stood at 50.6.

Production accelerated as new orders increased both domestically and abroad, with firms hiring additional staff to manage rising workloads.

Total new orders expanded for an eighth straight month, while new export orders rebounded, supported by demand from Southeast Asia.

However, business confidence slipped to a nine-month low amid worries about rising costs. “Looking ahead, if cost pressures persist while demand recovery is limited, profit margins will remain under pressure,” said Yao Yu, founder of credit research firm RatingDog in a CNBC report.

Jingyi Pan of S&P Global Market Intelligence said subdued confidence and rising geopolitical instability may weigh on demand in the coming months.

The private survey contrasted with an official PMI released by China’s National Bureau of Statistics, which showed manufacturing unexpectedly contracting to 49.3 in January.

Oil and metals slide as geopolitical fears ease

Commodity markets remained volatile after steep losses last week.

Spot gold was down about 6.4% at $4,556 an ounce, while silver fell around 9.5% to $76.43 an ounce.

Silver prices plunged roughly 30% on Friday, marking their worst one-day performance since 1980, while gold dropped about 9%.

Oil prices also fell sharply as investors scaled back fears of supply disruptions.

Brent crude slid as much as 5.2% to $65.69 a barrel, while US West Texas Intermediate dropped 5.34% to $61.76.

The decline followed comments by US President Donald Trump that Iran was “seriously talking” with Washington, signalling a potential easing in tensions.

“The talks are happening at the same time Iran is threatening a regional war should they be attacked, which could lead to substantially higher oil prices, an outcome that the Trump Administration would like to avoid,” said Andy Lipow of Lipow Oil Associates.

Disney board aligns on new CEO

In corporate news, the board of Walt Disney Co. is aligning on promoting theme-park division chairman Josh D’Amaro to chief executive officer, reported Bloomberg, citing people familiar with the matter.

If approved, D’Amaro would succeed Bob Iger, concluding a three-year CEO search.

“The board has not yet selected the next CEO of the Walt Disney Co. and once that decision is made, we will announce it,” a Disney spokesperson said.

Disney is scheduled to report fiscal first-quarter earnings on Monday, with its annual shareholder meeting set for March 18.

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