Asian shares fall as China Covid curbs concerns rise
22 November 2022 - 07:28
bySelena Li
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The trading gallery of the RHB Investment Bank Bhd. headquarters in Kuala Lumpur, Malaysia on November 21 2022. Picture: Samsul Said/Bloomberg
Hong Kong — Asian shares were on the defensive on Tuesday as a Covid-19 resurgence in China increased concerns that Beijing may reimpose strict pandemic curbs and that further restrictions could cause supply chain disruptions.
The dollar pulled back from strong overnight gains on Tuesday while oil took a pause from Monday’s retreat.
The broader Asia-Pacific index outside Japan lost 0.25% in early trade, while China’s benchmark dipped 0.13%. Hong Kong’s benchmark index fell 1.31%.
Japan’s benchmark Nikkei average opened up 0.78%, while Australian shares rose 0.55%.
“China’s Covid situation is really in the front row for Asia trading,” said Redmond Wong, market strategist for Greater China at Saxo Markets in Hong Kong.
Beijing warned on Monday that it was facing its most severe test of the pandemic, fuelling investor concerns that China may be forced to resume strict mobility curbs and give stay-at-home orders across cities.
Surging cases in manufacturing cities may cause supply chain disruptions, said Wong.
The dollar pared some of its strong overnight gains on Tuesday after investors flocked to the safe-haven currency on nerves over China’s Covid-19 flare-ups, but analysts at the National Australia Bank questioned whether demand for the greenback was sustainable.
“Evidence US inflation has peaked and can fall significantly in 2023, together with China and Europe developments, convince us a USD depreciation cycle is now in train,” they said in a note on Tuesday.
US treasury yields across most maturities rose on Tuesday amid expectations of further Federal Reserve interest rate hikes. The benchmark 10-year treasury yield rose six basis points.
Oil prices rose slightly in early Asian trade, a day after Saudi Arabia denied a media report that it was discussing an increase in oil supply with oil cartel Opec and its allies.
US crude rose 0.27% to $80.26 per barrel on Tuesday and Brent was at $87.79, up 0.19%. Spot gold traded at $1,738.39 an ounce.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Asian shares fall as China Covid curbs concerns rise
Hong Kong — Asian shares were on the defensive on Tuesday as a Covid-19 resurgence in China increased concerns that Beijing may reimpose strict pandemic curbs and that further restrictions could cause supply chain disruptions.
The dollar pulled back from strong overnight gains on Tuesday while oil took a pause from Monday’s retreat.
The broader Asia-Pacific index outside Japan lost 0.25% in early trade, while China’s benchmark dipped 0.13%. Hong Kong’s benchmark index fell 1.31%.
Japan’s benchmark Nikkei average opened up 0.78%, while Australian shares rose 0.55%.
“China’s Covid situation is really in the front row for Asia trading,” said Redmond Wong, market strategist for Greater China at Saxo Markets in Hong Kong.
Beijing warned on Monday that it was facing its most severe test of the pandemic, fuelling investor concerns that China may be forced to resume strict mobility curbs and give stay-at-home orders across cities.
Surging cases in manufacturing cities may cause supply chain disruptions, said Wong.
The dollar pared some of its strong overnight gains on Tuesday after investors flocked to the safe-haven currency on nerves over China’s Covid-19 flare-ups, but analysts at the National Australia Bank questioned whether demand for the greenback was sustainable.
“Evidence US inflation has peaked and can fall significantly in 2023, together with China and Europe developments, convince us a USD depreciation cycle is now in train,” they said in a note on Tuesday.
US treasury yields across most maturities rose on Tuesday amid expectations of further Federal Reserve interest rate hikes. The benchmark 10-year treasury yield rose six basis points.
Oil prices rose slightly in early Asian trade, a day after Saudi Arabia denied a media report that it was discussing an increase in oil supply with oil cartel Opec and its allies.
US crude rose 0.27% to $80.26 per barrel on Tuesday and Brent was at $87.79, up 0.19%. Spot gold traded at $1,738.39 an ounce.
Reuters
JSE faces mixed Asian markets amid concern about rising Covid cases in China
Market data — November 21 2022
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