Asian Stocks Fall as Economic Recession Concerns Persist

The majority of Asia-Pacific equities were trading in the red on Monday morning, as investors fretted about a potential economic downturn brought on by major central banks' tightening monetary policies.

The Nikkei 225 dropped 1.72 percent on 10:24 PM ET (2:24 AM GMT).

The KOSPI decreased by 2.36 percent.

The Australian ASX 200 index fell 1.03 percent.

The Hang Seng index declined 0.74 percent.

The Shanghai Composite fell 0.38 percent, while the Shenzhen Composite rose 0.42 percent.

Last week, major central banks increased interest rates, heightening investors' fears of a recession. Wednesday, the U.S. Federal Reserve announced a 75 basis point increase in interest rates, the largest increase since 1994. The Swiss National Bank unexpectedly increased interest rates by 50 basis points on Thursday, the same day that the Bank of England lifted its rates to 1.25 percent.

"Market volatility has remained elevated, with the VIX index posting its highest weekly finish since late April," NAB analyst Rodrigo Catril told Reuters. "This pattern extends beyond stocks, with an increase in FX and rates volatility as well as wider credit spreads."

"At this juncture, it is difficult to foresee a turnaround in fortunes unless there is evidence of a significant reduction in inflationary pressures."

Wednesday and Thursday, Fed Chair Jerome Powell will speak before the House of Representatives. The Fed said last week that its commitment to taming inflation was "unconditional," and Fed Governor Christopher Waller stated on Saturday that he would back a 75-basis-point rate rise in July.

In an effort to combat inflation, U.S. President Joe Biden said on Saturday that he was contemplating eliminating certain tariffs on China and pausing the federal gas tax.