fbpx

Type to search

Asia Shares Slip as Russia Gas Crisis, China Lockdowns Weigh

Stocks across the region slipped lower after Russia shut a major gas pipeline to Europe sparking fears of recession


Asian stocks slipped on Monday amid the Russia-EU gas crisis and concern over China's Covid lockdowns.
Tech giants listed in Hong Kong declined nearly 2% on Monday. Reuters photo.

 

Asian stocks picked up where they left off last week, on the back foot with worried traders preoccupied by the downbeat global outlook, new Covid curbs in China and the European gas crisis.

Japan’s Nikkei share average fell for a fourth straight session, tracking Wall Street’s weak performance last week.

US stocks ended the trading week on a subdued note on Friday, as early gains from a jobs report that showed a labour market that may be starting to loosen gave way to worries about the European gas crisis.

 

Also on AF:  China’s PBOC Cuts Banks’ FX Rate as Yuan Nears 7-USD Mark

 

The Nikkei edged down 0.11% to close at 27,619.61, while the broader Topix inched down 0.07% to 1,928.79.

Energy shares rose, with refiners and explores gaining 1.06% and 0.83%, respectively, after oil prices jumped.

China’s blue-chip stocks closed lower, led by consumer staples amid tightening Covid-19 curbs in some big cities, while foreign investors also dumped Chinese shares as the yuan tumbled to a more than two-year low.

And a strong rebound in China’s services sector eased slightly in August amid fresh Covid-19 flare-ups but business confidence rose to a nine-month high, a private survey showed.

Shanghai stocks, meanwhile, closed higher on boost from energy companies.

The blue-chip CSI 300 Index lost 0.2% at the close, while the Shanghai Composite Index rose 0.4%, or 13.43 points, to 3,199.91, while the Shenzhen Composite Index on China’s second exchange dropped 0.1%, or 1.65 points, to 2,088.09 after a weekend Covid lockdown in the city.

 

BYD Slips on Buffet Move

Tech giants listed in Hong Kong declined nearly 2%, with index heavyweights Meituan, Tencent and Alibaba down between 1.4% and 3%.

Electric vehicle maker BYD Co dropped 5.9% as Warren Buffett’s Berkshire Hathaway trimmed its stake in the company for a second time following last week’s reduction.

The Hang Seng Index overall dropped 1.16%, or 226.39 points, to 19,225.70 and the Hang Seng China Enterprises Index dropped 1.4%.

Elsewhere across Asia, stocks slid after Russia shut a major gas pipeline to Europe.

Indian stocks advanced with Mumbai’s signature Nifty 50 index up 0.72%, or 126.35 points, to close at 17,665.80.

Globally, European stock indexes opened lower and the euro dropped below 99 cents for the first time in 20 years after Russia said the gas supply down its main pipeline to Europe would stay shut.

Gas deliveries had been due to resume on Saturday but Russia scrapped this deadline and did not give a new timeframe for re-opening. The news reinforced expectations for a recession in Europe, as businesses and households are hurt by sky-high energy prices.

European gas prices jumped as much as 30% on Monday.

 

US Dollar Stays Steady

At 0743 GMT, the MSCI world equity index, which tracks shares in 47 countries, was down 0.5% on the day. Europe’s STOXX 600 was down 1.5%, not far from a seven-week low.

London’s FTSE 100 was 0.8% lower and Germany’s DAX was down 2.9%.

A public holiday in US markets means lower liquidity, which could lead to outsized market moves.

The US dollar index was steady and the risk-sensitive Australian dollar was near a seven-week low.

Oil prices rose more than $2 a barrel as investors waited for an OPEC+ meeting later in the day. Since March’s multi-year highs, oil prices have fallen due to concerns that interest rate rises and Covid-19 curbs in parts of China, the world’s top crude importer, may slow global economic growth.

 

Key figures

Tokyo – Nikkei 225 < DOWN 0.11% at 27,619.61 (close)

Hong Kong – Hang Seng Index < DOWN 1.16% at 19,225.70 (close)

Shanghai – Composite > UP 0.42% at 3,199.91 (close)

New York – Dow < DOWN 1.07% at 31,318.44 (Friday close)

 

  • Reuters with additional editing by Sean O’Meara

 

Read more:

China’s Trade Seen Falling in August Amid Softer Demand

China’s Home Sales Could Plunge by 20% This Year: Poll

 

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.

logo

AF China Bond