Asian Markets Tumble Amid U.S. Retail Slump, Trade Tensions

Asian markets largely traded in the red on Monday, reflecting a weak lead from Wall Street on Friday, following disappointing U.S. retail sales data. Investor sentiment remained cautious amid ongoing concerns over U.S. tariffs under President Donald Trump and broader global economic uncertainties.

Despite the overall bearish sentiment, Japan's GDP growth in the second quarter came in at an annualized rate of 1.8%, beating expectations and providing some relief to investors. However, the positive news was not enough to offset the negative impact of the weak U.S. retail sales report and trade tensions.

The U.S. retail sales report showed a decline of 0.2% in July, missing expectations of a 0.1% increase. This was the first decline in seven months and raised concerns about consumer spending, which accounts for more than two-thirds of U.S. economic activity. The weak data also raised questions about the strength of the U.S. economic recovery.

The weak U.S. retail sales report and ongoing trade tensions weighed on investor sentiment in Asia. The Nikkei 225 in Japan fell 0.7%, while the Shanghai Composite Index in China declined 0.5%. The Hang Seng Index in Hong Kong also fell 0.5%, and the Sensex in India dropped 0.4%.

The Australian dollar and New Zealand dollar both fell against the U.S. dollar, reflecting the weak investor sentiment. The U.S. dollar also strengthened against the Japanese yen and Chinese yuan. The Indian rupee and South Korean won also weakened against the U.S. dollar.

The weak U.S. retail sales report and ongoing trade tensions are likely to continue to weigh on investor sentiment in the coming days. However, the positive Japanese GDP growth data may provide some relief to investors. The focus will now shift to the U.S. inflation data and the Federal Reserve's policy meeting later this week for further direction on the markets.