Investing.com - Asian markets fell in morning trade on Monday, with Japanese stocks slumping more than 3% after U.S. equities closed sharply lower on Friday.
China’s Shanghai Composite and the Shenzhen Component were both down 0.9% by 10:15 PM ET (03:15 GMT). Hong Kong’s Hang Seng Index slid 1.6%.
Japan’s Nikkei 225 slumped 3.1%, while South Korea’s KOSPI fell 1.5%.
Down under, Australia’s ASX 200 declined 1.2%.
An inverted yield curve, a closely-watched signal of potential recession, appeared on Friday and was cited as the catalyst for the selling in stocks.
The yield curve is often interpreted as a powerful forecasting tool for recession. It inverted in each of the last seven recessions, according to the National Bureau of Economic Research.
The latest collapse came after the release of weak economic reports in France and Germany, while data showed growth in the U.S. manufacturing sector slowed to a 21-month low in March.
The last time the spread between the 3-month Treasury bill and the 10-year note went negative was in 2006, right before the economic downturn that began in the next year.
In other news, high-level officials from the U.S. and China will meet in Beijing later this week for a fresh round of trade talks.
Earlier reports suggested that the two sides might sign a trade deal sometime in April.
Brexit Developments are also expected to be in focus this week as U.K. Parliament is set to vote on Tuesday on Prime Minister Theresa May’s withdrawal deal, which has been rejected twice this year.
In the U.S., a summary of Special Counsel Robert Mueller's report submitted to Congress on Sunday concluded that President Donald Trump and his campaign did not collude with Russia in the 2016 election.
William Barr, who summarised the report for Congress, said that the evidence was not enough "to establish that the president committed an obstruction-of-justice offence.”
Barr cautioned that “while this report does not conclude that the president committed a crime, it also does not exonerate him” on the obstruction of justice issue.
Trump has in the past repeatedly described the inquiry as a witch hunt.
"It was a shame that the country had to go through this", said Trump on Sunday, adding that the inquiry was an "illegal takedown that failed".