(Bloomberg) -- Asian stocks dropped as investors favored safer assets after Italian Prime Minister Matteo Renzi said he’ll resign following a heavy defeat in a referendum on constitutional reform.
The MSCI Asia Pacific Index lost 0.6 percent as of 5:05 p.m. in Hong Kong. A U.S. jobs report for November on Friday showed an increase in nonfarm payrolls was more than in October, but wages unexpectedly declined, spurring weakness in the greenback and American equities.
“What the market is watching for is not so much the vote itself,” but the potential fallout from a Renzi resignation, said Ric Spooner, chief market analyst in Sydney at CMC Markets Asia Pacific Ltd. Payrolls “showed an improvement in the U.S. labor market and it’s all moving in the right direction for the Fed to continue raising rates,” he said.
Renzi, who had been pushing hard for constitutional reform, said he’ll resign after opponents of the proposal won Sunday’s referendum by 60 percent to 40 percent. The losses on Monday came after the biggest weekly decline for developed-market equities since Donald Trump’s election spurred bets on increased fiscal stimulus and a subsequent bounce in U.S. growth.
Japan’s Topix index fell 0.8 percent, the Shanghai Composite Index dropped 1.2 percent and Australia’s S&P/ASX 200 Index declined 0.8 percent. New Zealand’s S&P/NZX 50 Index retreated 0.7 percent after the country’s prime minister, John Key, said he will step down and his party will vote for a new leader on Dec. 12. South Korea’s Kospi lost 0.4 percent and the Philippine Stock Exchange Index decreased 1.6 percent.