Asia report: Stocks weaker amid fresh Covid fears in China

Stock markets were mostly lower across the Asia-Pacific region on Monday, as concerns over another re-emergence of Covid-19 in China weighed on sentiment.

In Japan, the Nikkei 225 was up 0.16% at 27,944.79, as the yen weakened 0.97% against the dollar to last trade at JPY 141.73.

Technology conglomerate SoftBank Group managed gains of 0.03%, while automation specialist Fanuc was down 0.34%, and fashion firm Fast Retailing lost 0.24%.

Some of Tokyo’s big trading houses were in the green after regulatory submissions revealed Warren Buffett’s Berkshire Hathaway increased its holding in the companies.

Itochu was up 0.96%, Marubeni added 2.08%, Mitsubishi was ahead 2.23%, Mitsui managed gains of 0.18%, and Sumitomo was 1.24% firmer.

According to CNBC, the filings showed Berkshire Hathaway increased its stake in those firms by more than 1% to hold at least 6% of each of them.

The broader Topix index gained 0.28% by the end of trading in Tokyo, settling at 1,972.57.

On the mainland, the Shanghai Composite was down 0.39% at 3,085.04, and the technology-heavy Shenzhen Composite was 0.41% weaker at 11,134.47.

The People’s Bank of China sated market expectations by keeping its interest rates on hold for the third consecutive month earlier in the day.

It kept the one-year loan prime rate at 3.65%, and the five-year rate at 4.3%.

South Korea’s Kospi dropped 1.02% to 2,419.50, while the Hang Seng Index in Hong Kong was 1.87% weaker at 17,655.91.

Reopening plays and technology firms were among the big losers in the special administrative region, after the first Covid deaths since May were reported in mainland China.

Among airlines, Air China was down 3.6%, Cathay Pacific Airways was off 2.01%, China Eastern Airlines lost 1.8%, and China Southern Airlines descended 4.56%.

Gambling and leisure plays were also in the red, with Galaxy Entertainment Group down 5.77%, MGM China off 7.2%, Sands China losing 7.75%, and Wynn Macau 5.92% lower.

Finally, among the Chinese technology stocks, Alibaba Group was 4.75% lower, JD.com was off 5.23%, and Meituan was 4.93% weaker.

The blue-chip technology stocks were on the back foot in Seoul, with Samsung Electronics down 0.65% and SK Hynix losing 2.38%.

“Asian investors were in a sombre mood following further Covid-19 outbreaks which resulted in further lockdowns,” said Interactive Investor head of markets Richard Hunter.

“In turn, this has stifled hopes of an opportunity for the Chinese economy to begin a recovery, while also providing a reminder of the country’s economic woes which range from deteriorating consumer sentiment to an ailing property sector.

“The likelihood of sustained and dampened activity has also impacted commodity prices and oil in particular, with the situation potentially lasting some more months in light of the country’s inability to stem the flow of cases thus far.”

Oil prices were lower at the end of the Asian day, with Brent crude futures last down 0.49% on ICE at $87.19 per barrel, and the NYMEX quote for West Texas Intermediate losing 0.6% to $79.60.

In Australia, the S&P/ASX 200 was off 0.17% to 7,139.30, while across the Tasman Sea, New Zealand’s S&P/NZX 50 rose 0.52% to 11,440.40.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.87% at AUD 1.5117, and the Kiwi retreating 0.5% to NZD 1.6346.

Reporting by Josh White for Sharecast.com.