Asian Shares Dip – Growth COVID-19 Cases in China
Asian stocks were in the red on Tuesday. The rise in COVID-19 cases in China hurt investor confidence. Most are already concerned about the Ukraine war and the first U.S. interest rate hike in three years, which could be realized this week. MSCI’s broadest Asia-Pacific stock index outside Japan fell 1.97% due to the pronounced weakness of Chinese stocks. The index fell 8.2% this month.
The global price of oil fell overnight. The prospect of negotiations between Russia and Ukraine gave a chance to reach a specific resolution; Also alleviated concerns about power outages. Investors’ attention shifted to the demand side. A new wave of COVID-19 infections in China has hit the world’s second-largest economy. More broadly, the lack of significant progress in the Ukraine-Russia talks on Monday added to the nervousness in the stock markets. Concerns are also growing about the potential for new tensions between China and the U.S.
Washington has warned Beijing of providing military or financial assistance to Moscow after it invades Ukraine. Sanctions are growing on Russian political and business leaders. According to experts, stock prices have fallen substantially. There is also no clarity about U.S. actions by Chinese regulators there. The Hang Seng index remained negative on Tuesday, falling 4%; The day before, after almost 5% sale. It is worth noting that the Hong Kong Main Board was reduced by 17% in March.
Promotions in China
The technical index of the city is damaged; It has dropped by almost 30% so far this March. Investors are concerned about the subsequent regulatory crackdown on the U.S. and Chinese governments in this sector. The CSI300 index fell 1.78%; Thus, the monthly losses reached 11.2%. Australian shares closed at 0.73% to avoid weakness in Asia, S&P 500 stock futures rose 0.21%. The Nikkei index reversed its loss and was slightly higher, totaling 0.22%.
Adding to the overall negative sentiment of the markets is the increase in the number of COVID-19 cases in China. It fears it will hurt economic growth on the mainland in the first quarter. China announced 3,602 new confirmed coronavirus cases on Tuesday. At the Asian session, U.S. crude oil fell another 5.2% to $97.66 a barrel. The price of Brent crude oil dropped by 5.16%. Finally, it was $101.37 per barrel. Investors are also focusing on the U.S. Federal Reserve, which meets on Wednesday. For the first time in three years, interest rates should rise to offset rising inflation.
Wall Street has had a mixed session. The decline in technology companies led to the closure of most indexes on Monday. The interest rate on 10-year benchmark Treasury bonds increased to 2.1384%. The two-year yield, which rises above the Fed’s higher interest rates, stood 1.865%. Gold was also weak in Asia; The spot price was $1,932.1/ounce.
