SYDNEY- Asian share markets retreated on Tuesday as global investors awaited India’s official election results and considered the prospect that the US economy’s ‘exceptionalism’ is starting to unwind as manufacturing activity there further weakened.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.4 percent , after US stocks ended the previous session with mild gains. The index is up 2.1 percent so far this month.
Australian shares were down 0.15 percent , while Japan’s Nikkei stock index slid 0.11 percent .
Hong Kong’s Hang Seng Index was up 0.33 percent and China’s CSI300 Index up 0.23 percent after initially opening in negative territory.
In India, share markets sold off sharply after early vote counting showed Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP)-led alliance was not headed for a landslide win as predicted.
A Modi victory had been expected to be positive for the country’s financial markets, according to analysts, on the hope India will undertake further economic reform.
But the reduced prospect of Modi’s alliance winning an overwhelming majority rattled investors.
The Nifty index dropped as much as 5.43 percent to 22,000.60 points, while the BSE index fell 5.4 percent to 72,337.34 points. Both indexes had touched all-time highs on Monday.
Both markets recovered slightly to trade down around 2.3 percent each.
In early European trades, the pan-region Euro Stoxx 50 futures slipped 0.1 percent to 5,007, German DAX futures were down 0.21 percent at 18,615 and FTSE futures were down 0.09 percent at 8,265.5.
US stock futures, the S&P 500 e-minis were up 0.01 percent at 5,297.8.
The strength of the US labor market will be closely watched in the new few days with the Job Openings and Labor Turnover Survey (JOLTS) due to be published later on Tuesday.
Non-farm payroll figures for May are out on Friday.
“We’re expecting a slight easing in demand for labor in the US market,” said Raisah Rasid, JPMorgan Asset Management’s global market strategist.
