Asian Markets Slump Despite China's Rate Cut, Biden Withdraws from Election Race

Asian shares fell on Monday even after China's central bank cut short-term rates. Investors were unimpressed, citing a weak economy. U.S. futures rose after President Biden withdrew from the election race, endorsing Kamala Harris. Corporate earnings, including those from Tesla and Alphabet, and important economic indicators are expected this week.

Asian shares slid anew on Monday, receiving little boost from a surprising rate cut by China's central bank. The People's Bank of China decreased short-term rates by 10 basis points, aiming to lower long-term borrowing costs and bond yields. However, this move highlighted the frail state of the economy, with Chinese blue chips slipping by 0.8%.

"All fundamental factors point to the need for a lower rate environment in this disinflationary climate," remarked Gary Ng, Asia-Pacific senior economist at Natixis. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 1.0%, echoing last week's 3% loss.

Meanwhile, Wall Street futures firmed after President Joe Biden announced his decision to exit the election race, endorsing Vice President Kamala Harris. Online betting markets showed decreased chances for a Donald Trump victory, while Harris's chances improved. S&P 500 and Nasdaq futures inched up, reflecting this development.