Asian markets, crude drop following protests in China

Asian markets, crude drop following protests in China

FILE PHOTO: A logo of the Hong Kong Stock Exchange (HKEX) in Beijing, China September 4, 2020. (Reuters)

FILE PHOTO: A logo of the Hong Kong Stock Exchange (HKEX) in Beijing, China September 4, 2020. (Reuters)

Stocks and oil prices fell on Monday on concerns over protests across China calling for political freedoms and an end to the government’s sweeping zero-Covid policy, fueling uncertainty in the world’s second-largest economy.

Hundreds of people took to the streets over the weekend in the country’s largest protests since pro-democracy rallies in 1989 were crushed.

A deadly blaze in the Xinjiang region on Thursday served as a catalyst for public anger, with many blaming virus lockdowns for hampering rescue efforts.

People took to the streets in Beijing, Shanghai, Guangzhou and Chengdu to demand an end to lockdowns, after a relaxation of some measures fueled hopes for a lighter pandemic approach.

China-related stocks were the biggest sell-off, with Hong Kong’s Hang Seng index down 1.8% and Shanghai’s down 0.8%. The yuan lost more than 1%.

There were also losses in Tokyo, Sydney, Seoul, Singapore, Taipei, Jakarta, Bangkok and Wellington.

“Sentiment has turned sour as unrest across China grows,” said Stephen Innes of SPI Asset Management. “Protests of this magnitude are rare in the country and raise many uncertainties.

“The best-case scenario is further easing and reopening, but the speed at which things have deteriorated over the weekend suggests the government needs to act quickly. The risk of the situation escalating from here and short-term volatility remains high.”

Ken Cheung of Mizuho Bank added, “It looks like the zero-Covid policy is reaching its tipping point. A relaxation or refinement of the Covid measures will be necessary to curb discontent.

The prospect of a blow to demand from the world’s biggest crude importer sent oil prices tumbling, with the two major contracts falling more than 2%.

The selloff somewhat pared recent gains in the markets on hopes of a slowdown in Federal Reserve interest rate hikes as inflation finally shows signs of easing.

However, some observers said the protests could bring long-term benefits as they could force President Xi Jinping to abandon his tough and economically damaging measures sooner.

Gabriel Wildau of Teneo Holdings said: “I don’t expect Xi to publicly admit a mistake or show weakness, but this outpouring of protests could lead leaders to decide privately that the exit should go ahead. faster than expected.”

Investors are now eagerly awaiting the release of US jobs data at the end of the week, which could provide clues about the Fed’s next steps, while speeches by central bank chief Jerome Powell and other key decision makers will also be examined.

“While figures like Federal Reserve Governor Christopher Waller can talk about the fact that the (policy board) is not going to react based on an October consumer price index – when the headline figure is below expectations at 7.7% – the inescapable fact remains that the US CPI has been rising at a slower pace since June,” said Michael Hewson of CMC Markets.

– Key figures around 2:10 p.m. –

Tokyo – Nikkei 225: 0.4% decline to 28,162.83 (closing)

Hong Kong – Hang Seng Index: DOWN 1.8% to 17,256.50

Shanghai – Composite: DOWN 0.8% to 3,078.55 (close)

Euro/dollar: DOWN to $1.0371 from $1.0403 on Friday

Dollar/yen: DOWN to 138.23 yen against 139.03 yen

Pound/dollar: DOWN to $1.2069 from $1.2087

Euro/pound: DOWN to 85.93 pence against 86.03 pence

West Texas Intermediate: DOWN 2.4% to $74.43 a barrel

North Sea Brent Crude: DOWN 2.4% to $81.71 a barrel

New York – Dow: UP 0.5% to 34,347.03 (closing)

London – FTSE 100: UP 0.3% to 7,486.67 (closing)

#Asian #markets #crude #drop #protests #China

Leave a Comment

Your email address will not be published. Required fields are marked *