China’s rising Covid-19 cases and US tensions knock Asian stocks
Bengaluru — Asian stocks fell across the board on Thursday as investors were unsettled by risks of renewed US-China tension, potentially adding to existing global supply chain issues, while the Indonesian rupiah led losses among currencies.
Stocks of trade-reliant Asian countries like Philippines, Singapore and Indonesia shed between 0.3% and 0.7%. Shanghai equities dropped the most, down 1.1%, with the yuan easing 0.1%.
Investor focus was squarely on developments in China, grappling with an economic slowdown due to an energy crunch and crisis in its property sector, with fresh Covid-19 outbreaks adding to jitters. News of the US telecoms regulator revoking China Telecom’s authorisation to operate late on Wednesday compounded worries for market participants only too aware that tensions between the world’s two biggest economies previously threw global trade into a disarray.
“Focus in the region may revolve around ongoing Covid-19 risks in China, with infections in Beijing at an eight-month high,” said Yeap Jun Rong, market strategist at retail trading platform IG. The ban on China Telecom also “fuelled concerns that further escalation could possibly bring back more US scrutiny on Chinese technology players, weighing on sentiment”.
Jakarta shares fell as much as 1.2%, to a two-week low, with energy stocks leading the decline as coal futures plunged after China stepped up ways in which it can control prices. Indonesia is the world’s top thermal coal exporter. The rupiah fell 0.2% on the same news, having lost 1.3% over the past 10 days since Beijing pledged to intervene in the coal market.
The Philippine peso and the South Korean won also slipped, while most other currencies traded flat as souring risk sentiment supported the dollar’s safe-haven status in the Asia trading session. The Malaysian ringgit recouped early losses to gain 0.1% after September’s trade data beat expectations handily due to a surge in petroleum products and palm oil exports.
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