Markets

Asia Shares Mixed as Covid Fears Weigh Despite China Stimulus

 

Asia’s major markets returned mixed results on Tuesday with a strong US dollar, worries over China’s Covid situation and the gloomy global picture all having an impact on investor sentiment.

Some indexes were able to recoup early losses but concerns linger that Beijing may be set to reimpose strict Covid curbs that could cause even more supply chain disruptions.

Tokyo stocks advanced, though, with exporters bolstered by the muscular dollar, though many investors stayed on the sidelines ahead of a series of holidays.

 

Also on AF: China’s Ant Group Seen Facing $1bn-Plus Fine After Big Revamp

 

The benchmark Nikkei 225 index gained 0.61%, or 170.95 points to end at 28,115.74. The broader Topix index was up 1.12%, or 22.18 points, to 1,994.75.

The dollar stood at 141.88 yen, hovering near 142.10 yen in New York late Monday.

A wide range of shares enjoyed gains, with aviation firms, shipping, steel and banks among the winners.

The broad Asia-Pacific index tracking shares outside Japan recovered earlier losses to inch 0.07% higher in the afternoon.

The biggest driver for the recovery was China, with support coming from the property sub-sector as fresh government moves to aid the struggling industry helped sentiment.

China’s central bank said late on Monday it will provide 200 billion yuan ($28 billion) in loans to six commercial banks for housing completions.

 

China Covid Curbs Fears

Gains in China were capped, however, by the worsening Covid-19 situation in the country.

The Shanghai Composite Index rose 0.13%, or 3.90 points, to 3,088.94, while the Shenzhen Composite Index on China’s second exchange dropped 1.29%, or 26.11 points, to 2,002.39.

The Hang Seng Index dropped 1.31%, or 231.50 points, to 17,424.41.

The Chinese capital warned on Monday it was facing its most severe test of the pandemic, fuelling investor concerns that China may be forced to resume strict mobility curbs and issue stay-at-home orders across its cities.

Surging cases in manufacturing cities may cause supply chain disruptions, warned Redmond Wong, market strategist for Greater China at Saxo Markets in Hong Kong.

 

US Treasury Yields Rise

Elsewhere across the region, Australian shares rose 0.59%, supported by strength in miners and banks.

Indian stocks were up with Mumbai’s signature Nifty 50 index rising 0.46%, or 84.25 points, to close at 18,244.20.

Globally, the dollar pulled back from strong overnight gains while oil took a pause from Monday’s retreat.

European stock futures indicated a sluggish open with Eurostoxx 50 futures up 0.15%, German DAX futures up 0.09% and FTSE futures up 0.30%.

US Treasury yields across most maturities rose amid expectations of further Federal Reserve interest rate hikes, as the market awaits latest Fed minutes due to be released on Wednesday to provide greater clarity. The benchmark 10-year Treasury yield rose five basis points.

Oil prices rose, a day after Saudi Arabia denied a media report that it was discussing an increase in oil supply with OPEC and its allies.

US crude extended gains from early trades to rise 0.36% to $80.33 per barrel and Brent was at $87.88, up 0.49%.

Spot gold up 0.3% to trade at $1,742.91 an ounce.

 

Key figures

Tokyo – Nikkei 225 > UP 0.61% at 28,115.74 (close)

Hong Kong – Hang Seng Index < DOWN 1.31% at 17,424.41 (close)

Shanghai – Composite > UP 0.13% at 3,088.94 (close)

London – FTSE 100 > UP 0.89% at 7,442.36 (0935 GMT)

New York – Dow < DOWN 0.13% at 33,700.28 (Monday close)

 

  • Reuters with additional editing by Sean O’Meara

 

Read more:

Chinese Companies Raise the Most From IPOs This Year

China’s Key Money Rate Sinks Close to 2-Year Low

 

Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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