Chinese shares jump, turning around from declines amid Covid fears as Beijing expands mass testing

SINGAPORE — Chinese stocks turned around from early declines on Tuesday after plunging the previous day, despite Covid fears in China as Beijing expands mass testing.

The Shanghai composite was up nearly 1%, while the Shenzhen component jumped 1.31%. The CSI 300 rose 1.41%.

Hong Kong’s Hang Seng index jumped 1.86% , adding on to the morning’s gains after dropping more than 3% the previous day. The Hang Seng Tech index was up more than 5%.

Earlier, China’s central bank released comments from an interview with the Financial Times saying it has noticed recent “fluctuations” in the country’s stock markets, which it said were mostly caused by investor sentiment.

“At present, my country’s economic fundamentals are sound, the potential for endogenous economic growth is huge, and substantial progress has been made in preventing and defusing financial risks,” according to the English comments. The People’s Bank of China added that it will increase support for the economy, especially for industries severely affected by the pandemic.

Markets reacted negatively to news that Covid is spreading more rapidly in China, prompting fears of additional lockdowns and reduced output. This directly impacted Asian markets and also rippled through global financial markets.

ANZ Research

Brian Martin and Daniel Hynes

Mainland and Hong Kong stocks had tumbled Monday as worries over a Covid surge and potential lockdowns in Beijing took hold. Beijing also announced late Monday that mass testing will be expanded to another 10 districts and one economic development area, according to Reuters.

“Markets reacted negatively to news that COVID is spreading more rapidly in China, prompting fears of additional lockdowns and reduced output. This directly impacted Asian markets and also rippled through global financial markets,” ANZ Research analysts Brian Martin and Daniel Hynes wrote in a Tuesday note.

Zhang Zhiwei, chief economist at Pinpoint Asset Management, said he sees risks that China’s GDP may shrink in the second quarter.

“Many high frequency indicators such as mobility, truck cargo, power plant coal utilization show negative growth. It is not clear where the bottom of this economic slowdown is without a change of the zero tolerance policy,” he said.

Other Asia markets mixed

Japan’s Nikkei 225 rose 0.65%, while the Topix rose 0.37%. South Korea’s Kospi jumped 0.71%.

Australian stocks however fell as trading resumed from a holiday on Monday. The S&P/ASX 200 plummeted almost 2%.

Stock picks and investing trends from CNBC Pro:

Major miners slumped, as Rio Tinto fell more than 3%, Fortescue Metals dived 6.4% and BHP plummeted more than 5%.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up about 1%.

In earnings, HSBC is set to report its first-quarter results.

U.S. stocks were in negative territory earlier in the day, but recovered by the close. The Dow Jones Industrial Average cut a nearly 500-point intraday loss Monday, rising 238.06 points, or 0.7%, to 34,049.46. The S&P 500 ticked up 0.6% to 4,296.12. The tech-heavy Nasdaq Composite gained 1.3% at 13,004.85.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 101.545, extending its rise from levels just above 101.

The Japanese yen traded at 127.54 per dollar, a touch firmer than levels above 128.1 earlier. The Australian dollar was at $0.7185, trading slightly down from around $0.718 earlier.

Oil prices rose on Tuesday morning in Asia trade after tumbling on Monday as Covid fears in China raised demand fears.

U.S. crude futures traded 0.33% higher to $98.87 per barrel. International benchmark Brent crude futures rose 0.40% to $102.73 per barrel.

SOURCE: CNBC

The Lagos Herald

The Lagos Herald initiative trains individuals of all ages to be more discerning internet material consumers. With efforts particularly geared to engage Gen Z, college students, and older generations, we educate individuals on digital media literacy and fact-checking skills to recognize misinformation and disinformation. Our cutting-edge, digital-first program is continuously working to address the ever-changing world of disinformation on the internet. We think that when facts win, democracy triumphs.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button