Asian markets decline: Major Asian stock markets dropped on Monday, mirroring the downward trend witnessed on Wall Street, which concluded its worst week since September.

Despite Congressional leaders reaching an agreement on spending levels for the current fiscal year—a development that could potentially stave off a partial government shutdown—US futures remained lower, setting a cautious tone for global markets.

Adding to market jitters, oil prices plummeted after Saudi Arabia slashed prices for Asian markets to their lowest level in 27 months, contributing to the overall subdued sentiment.

Hong Kong's Hang Seng led the decline, dropping 1.9 per cent, with technology shares taking a 2.4 per cent hit, while the Shanghai Composite slipped 1.2 per cent.

China's announcement of sanctions against five American defence-related companies further weighed on market sentiment, retaliating against US arms sales to Taiwan and prior sanctions on Chinese entities. This announcement, just ahead of Taiwan's presidential election, focussed on the island's relationship with China, intensifying geopolitical concerns.

South Korea's Kospi shed 0.2 per cent, Australia's S&P/ASX 200 lost 0.5 per cent, and Taiwan's Taiex gained 0.5 per cent. Meanwhile, markets in Japan were closed for a holiday.

Inflation report

Investor focus in the upcoming days remains fixed on the release of inflation reports from Japan, the US, and China, pivotal indicators that could sway market sentiment.

On Wall Street last Friday, the S&P 500 and the Dow Jones Industrial Average eked out modest gains, closing at 4,697.24 and 37,466.11, respectively.

However, Treasury Yields swung sharply in response to economic reports, initially rising after a robust monthly jobs report, only to retreat following a weaker-than-expected growth report for the US services sector.

The conflicting data compounds Wall Street's concerns about the Federal Reserve's stance on inflation and interest rates, as strong economic indicators could prolong higher interest rates, impacting stock prices negatively.

Amidst the market volatility, Constellation Brands saw a 2.1 per cent increase in its stock value following better-than-expected quarterly profits. Conversely, tech giant Apple experienced a 0.4 per cent dip, culminating in its worst week since September, shedding 5.9 per cent in value.

Oil prices faced a downturn as US benchmark crude slipped to $72.98 per barrel, while Brent crude, the international standard, fell to $77.89 per barrel in electronic trading on the New York Mercantile Exchange.

The US dollar faced a minor dip, with the dollar-yen pairing at 144.49 and the euro sliding to $1.0933.

(With PTI Inputs)