MSCI’s broadest index of Asia-Pacific shares outside ‌Japan dipped 2.8%, while Chinese blue chips dropped 1.0%, with heavy declines in gold indexes

Asian shares were deep into the red on Monday as chaotic selling in precious metals made for a nervous start to a week that is packed with ​corporate earnings and major economic data.

Silver shed another 10% at one stage, as Friday’s 30% slump squeezed leveraged positions in what had become a very ‌crowded trade. Dealers said pressure on the UBS SDIC silver futures fund in China added to the rout, with talk of investors having to sell profitable assets to cover margin calls.

Adding to the unease was a move by the CME to raise margins on a number of futures contracts, including gold and silver.

Oil prices also dropped more than 4%.

The jitters saw formerly high-flying KOSPI drop 5.5%, the biggest one-day loss since the tariff-induced market mayhem of last April.

MSCI’s broadest index of Asia-Pacific shares outside ‌Japan dipped 2.8%, while Chinese blue chips dropped 1.0%, with heavy declines in gold indexes.

Nikkei was down 1.0%, supported only briefly by an opinion poll ​suggesting Prime Minister Sanae Takaichi’s Liberal Democratic Party was likely to score a landslide victory in next week’s lower house election.

Such a victory would likely make it easier to push through aggressive stimulus policies, and ease political uncertainty. More debt-funded spending could pressure bonds and the yen, with Takaichi talking up the benefits of a weaker currency for exports.

It was also a busy week for earnings in Europe, with around ‍30% of Euro STOXX market capitalisation due to report. EUROSTOXX 50 futures and DAX futures both shed 1.1%, while FTSE futures declined 0.5%.