Asian stock markets traded sharply lower on Monday morning as oil prices slumped following reports that OPEC failed to reach a deal with its allies on production cuts.
Japan’s Nikkei 225 slid 5.5% after data showed the country’s GDP shrank at an annualized pace of 7.1%, which was faster than expected. Prime Minister Shinzo Abe is due to detail new emergency measures on Tuesday.
China’s Shanghai Composite and the Shenzhen Component fell 2.5% and 2.4% respectively.
Hong Kong’s Hang Seng Index slumped 3.4%.
South Korea’s KOSPI lost 3.8%.
Down under, Australia’s ASX 200 plunged 5.6%.
Oil prices plunged about 25% after Saudi Arabia announced massive discounts on Saturday to its official selling prices for April. The kingdom will reportedly up its production level above the 10 million barrel per day.
It was reported that talks between OPEC and its allies broke down on Friday in Vienna. The cartel had recommended additional production cuts on Thursday, but that was rejected by Russia.
Existing production cut is set to expire at the end of the month.
“As from 1 April we are starting to work without minding the quotas or reductions which were in place earlier,” Russian Energy Minister Alexander Novak told reporters at the OPEC+ meeting in Vienna, adding, “but this does not mean that each country would not monitor and analyze market developments.”
In other news, the new coronavirus continued to spread as the number of people infected topped 107,000 globally. Over the weekend, Italy’s government ordered a lockdown in parts of the country, including Milan.