(AF) Global shares stumbled on Tuesday, rattled by concerns over China’s regulations for its once-freewheeling internet sector and a worldwide spike in COVID-19 infections driven by the Delta variant.
Markets in China were hit by a regulatory crackdown on private business by Beijing that continued to leave investors on edge, with Hong Kong closing at its lowest level in three weeks and Shanghai closing well down. Asian bourses were broadly down, too, amid concerns of an economic slowdown in China triggered by its zero-tolerance approach to dealing with new outbreaks in the country. Those concerns outweighed record gains on Wall Street, which had triggered early advances in the region.
Major US indices rebounded overnight from a slow start as bargain hunters stepped up purchases – leaving both the Dow and S&P 500 finishing narrowly positive to extend a streak of record-high closes to a fifth straight day.
Tokyo opened higher before erasing early gains and closing down for a fourth consecutive session as fears over a surge in virus cases dampened hopes for the recovery.
“As long as the number of new cases continues to rise to record highs, investors won’t feel encouraged,” Yoshihiro Ito, senior strategist at Okasan Online Securities, said in a note.
Seoul, Taipei D0wn
Markets in Seoul and Taipei were down, as was Sydney, where millions remain under coronavirus restrictions with little end in sight as cases tied to the Delta variant soar.
Wellington also ended the day on losses, hit by news that New Zealand would move into a snap three-day lockdown after recording its first case of locally transmitted Covid-19 in six months.
London, Paris and Frankfurt all opened down.
The virus gloom has also hit oil prices, which fell for a fourth straight day prompted by the weak economic data from Beijing.
“As data begins to reflect the full impact of the shutdown in China, investors are worried this negative trend we’re seeing won’t just be a localised issue,” Bart Melek of TD Securities said.
“We are moving from expectations of a robust deficit to a potential surplus as the variant continues to halt the growth rate of demand.”
But some cause for optimism may come later in the day stateside, where investors will be closely watching the US retail sales data for signs that the country’s consumer spending remains healthy.
Tokyo’s Nikkei 225 fell 0.4% to 27,424.47
Hong Kong’s Hang Seng Index lost 1.7% to 25,725.87
Shanghai’s Composite slid 2% to 3,446.97
West Texas Intermediate crude dropped to 66.89 per barrel
- Reuters, AFP, Mark McCord
This story was updated with additional details and a new headline.