Friday, September 30, 2022

Mainland Chinese stocks continue to fall amid Covid fears as Beijing expands massive testing

SINGAPORE – Chinese stocks continued to tumble on Tuesday after falling the previous day, as investors fled the market in response to COVID fears in China as Beijing expands massive testing.

The Shanghai Composite fell 0.74%, while the Shenzhen Component fell 0.7%. The CSI 300 was down 0.49%.

Hong Kong’s Hang Seng index bucked the trend with a gain of 0.4% after falling more than 3% the previous day.

Markets reacted negatively to news that COVID is spreading more rapidly in China, threatening additional lockdowns and lower production. This had a direct impact on Asian markets and also on global financial markets.

ANZ Research

Brian Martin and Daniel Hines

Shares in mainland and Hong Kong fell on Monday as concerns over a Covid escalation and a possible lockdown in Beijing took hold. Beijing also announced late Monday that large-scale testing would be expanded to another 10 districts and an economic development zone, according to Reuters.

ANZ Research analysts Brian Martin and Daniel Hines wrote on Tuesday, “Markets reacted negatively to news that COVID was spreading more rapidly in China, prompting fears of additional lockdowns and lower production. directly affected the markets and also caused a stir in the global financial markets.” note.

Zhang Zhiwei, chief economist at Pinpoint Asset Management, said he was at risk that China’s GDP could decline in the second quarter.

“Many high frequency indicators such as mobility, truck cargo, power plant coal use show negative growth. It is not clear where the bottom of this economic slowdown lies without a change in zero tolerance policy,” he said.

Other Asia Market Mixed

Japan’s Nikkei 225 rose 0.37%, while Topix rose 0.11%. South Korea’s Kospi rose 0.49%.

However, Australian shares fell as trading resumed after the holiday on Monday. The S&P/ASX 200 fell nearly 2%.

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Major miners fell as Rio Tinto fell over 4%, Fortescue Metals by 6.4% and BHP by over 5%.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1%.

In earnings, HSBC is set to report its first quarter results. Tuesday’s economic data will include South Korea’s gross domestic product for the first quarter.

US stocks were in negative territory earlier in the day, but recovered from the close. The Dow Jones Industrial Average cut nearly 500-point intraday losses on Monday, rising 238.06 points, or 0.7%, to 34,049.46. The S&P 500 closed 0.6% higher at 4,296.12. The tech-heavy Nasdaq Composite ended 1.3% higher at 13,004.85.

currencies and oil

The US dollar index, which tracks the greenback against a basket of its peers, was at 101.545, marking its rise from levels above 101.

The Japanese yen was trading at 127.54 per dollar, a touch stronger than the earlier level of 128.1. The Australian dollar was at $0.7185, down slightly from around $0.718 earlier.

Oil prices rose on Tuesday morning in Asia trade on Monday after fears of Kovid in China increased demand.

US crude futures rose 0.33% to $98.87 a barrel. International benchmark Brent crude futures rose 0.40% to $102.73 a barrel.

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Nation World News Desk
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