Asia report: Markets fall as Shanghai faces fresh lockdowns

Most stock markets in Asia were on the back foot on Thursday, as sentiment was dampened by reports of renewed Covid-19 restrictions in parts of Shanghai.

In Japan, the Nikkei 225 managed gains of 0.04% to 28,246.53, as the yen strengthened 0.48% on the dollar to last trade at JPY 133.60.

Robotics specialist Fanuc was down 0.79%, while Uniqlo owner Fast Retailing gained 1.94% and tech investing giant SoftBank Group advanced 1.73%.

The broader Topix index was off 0.05% by the end of trading in Tokyo, settling at 1,969.05.

On the mainland, the Shanghai Composite was 0.76% weaker at 3,238.95, and the technology-centric Shenzhen Component lost 1.85% to 11,810.58.

Reports that the government was implementing fresh Covid-19 curbs in the country’s largest city Shanghai turned sentiment negative in the People’s Republic, just weeks after the city emerged from its latest lockdown.

China’s ‘zero Covid’ policy has come under heavy criticism in recent months, as the swinging to and from lockdown restrictions affects activity and is at odds with the post-vaccine reopening seen in most other large economies.

Fresh data out of the country showed exports rising 16.9% year-on-year in May and imports growing 4.1%.

Both of those measures were far greater than what markets were expecting, with analysts polled by Reuters pencilling in rises of 8% and 2%, respectively.

“The latest China trade numbers for May indicated a decent recovery in imports and exports, after both stalled in April when the Chinese economy ground to a halt because of lockdowns and Covid restrictions,” said CMC Markets chief market analyst Michael Hewson.

South Korea’s Kospi was 0.03% weaker at 2,625.44, while the Hang Seng Index in Hong Kong was 0.66% lower at 21,869.05.

The blue-chip technology stocks were on the back foot in Seoul, with Samsung Electronics down 0.15% and SK Hynix 0.47% lower.

Oil prices were lower as the region went to bed, with Brent crude futures last down 0.08% on ICE at $123.48, while the NYMEX quote for West Texas Intermediate lost 0.19% to $121.88 per barrel.

In Australia, the S&P/ASX 200 slid 1.42% to 7,019.70, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.49% weaker at 11,211.31.

The down under dollars were mixed against the greenback, with the Aussie last 0.06% weaker at AUD 1.3916, while the Kiwi strengthened 0.04% to NZD 1.5507.

Reporting by Josh White at Sharecast.com.