Asia report: Markets mixed as China responds to fresh Covid outbreak
Stock markets in Asia closed in a mixed state on Monday, with Hong Kong’s main index leading the losses, as investors kept an eye on a fresh Covid-19 outbreak in China while also monitoring developments in Russia’s invasion of Ukraine.
In Japan, the Nikkei 225 was up 0.58% at 25,307.85, as the yen weakened 0.66% against the dollar to last trade at JPY 118.06.
It was a negative day for the benchmark’s major components, with automation specialist Fanuc down 0.28%, fashion firm Fast Retailing losing 1.41%, and technology conglomerate SoftBank Group off 0.74%.
The broader Topix index was 0.71% firmer by the end of trading in Tokyo, closing at 1,812.28.
On the mainland, the Shanghai Composite lost 2.6% to 3,223.53, and the smaller, technology-heavy Shenzhen Composite was 2.93% lower at 2,109.46.
China’s authorities moved quickly to respond to a fresh wave of Covid-19 infections over the weekend, with the major manufacturing and trading city of Shenzhen now under restrictions on mixing and movement.
It was reported that the outbreak is China’s worst since it first responded to the Covid-19 pandemic in the city of Wuhan in early 2020.
South Korea’s Kospi was 0.59% weaker at 2,645.65, while the Hang Seng Index in Hong Kong plunged 4.97% to 19,531.66.
Technology plays led the losses in the special administrative region, with Alibaba Group falling 10.9%, Meituan tumbling 16.84%, and Tencent Holdings 9.79% lower.
Covid-19 infections were also spiking in Hong Kong, which lies just across the Sham Chun River from Shenzhen.
Seoul’s blue-chip technology stocks were in a mixed state, with Samsung Electronics up 0.29%, while SK Hynix lost 0.85%.
Oil prices fell from last week’s highs over the weekend, and continued to weaken as the region went to bed, with Brent crude futures last down 3.75% on ICE at $108.44 per barrel, and West Texas Intermediate losing 4.95% to $103.92.
“One silver lining from last week was the fact that we saw a softening in commodity prices, in a week that saw crude oil prices post their biggest weekly drop since November, despite hitting their highest levels since 2008,” said CMC Markets chief market analyst Michael Hewson.
“Wheat prices also saw a big weekly fall - the biggest in over a decade, despite also posting a new record high.
“This trend of weaker prices has continued in Asia markets this morning.”
In Australia, the S&P/ASX 200 was 1.21% firmer at 7,149.40, while across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.14% to 11,805.11.
The down under dollars were both weaker against the greenback, with the Aussie last off 0.69% at AUD 1.3809, and the Kiwi retreating 0.16% to NZD 1.4720.