Latest News

China, HK Shares Fall on COVID-19 Situation

China, HK Shares Fall on COVID-19 Situation

Shares in China and Hong Kong dropped on Wednesday. The region was still harrowed with the disruption of COVID-19. Energy stocks dominated the sell-off in global oil markets. The CSI 300 index lost 1.3%. The Shanghai Composite Index also fell by 1.3%. The Hang Seng Index weakened by 1.4%. China is battling a resurgence of COVID-19 on multiple fronts across the country. This includes the emerging cluster in Shanghai, which is promoting mass testing drives and new restrictions.

Shanghai, which raised its two-month lockdown in June, is checking all residents in nine of its districts. According to economists, the explosions in Shanghai contributed to the weakness of the stock market. However, the market was expecting a possible increase in infections, so there were no signs of panic selling. Experts expect higher volatility. The pace of China’s economic recovery may be slow.

Energy stocks fell more than 5% in both China and Hong Kong amid fears of an economic recession following a slump in global oil prices. Most sectors declined in both markets. Chinese property shares dropped by 3.6%; The share of resources decreased by 2.9%. Tech stocks were the only bright spot on the mainland. The STAR50 index rose 1.3%, led by chipmakers.

Asian Shares

Asian shares were mostly lower in late trading on Wall Street on Wednesday amid concerns about a global recession. Major signs fell across Asia. Oil prices lost some ground after falling on Monday. According to analysts, markets focus on different risks including inflation, the US Federal Reserve, oil prices, and other central bank movements on interest rates. Also on political events in Britain and concerns about COVID-19. However, the underlying mood seemed to be one of waiting.

Wall Street opened weakly after markets were closed on Monday for the Independence Day holiday. The price of US crude oil fell by 8.93 dollars. And finally, it decreased below 100 dollars per barrel for the first time since the beginning of May. On Wednesday, US crude boosted to 60 cents. In total, it amounted to 100.10 dollars per barrel. The price of international standard Brent oil reached 104.01 dollars per barrel.

Market volatility reflects growing concern among investors that the economy is slowing under the weight of rising inflation and sharply higher interest rate tensions that could boost them into recession.

Japan’s benchmark Nikkei 225 lost 1.3% in morning trade, totalling 26,078.66. The S&P/ASX 200 fell to 6,592.80. The Kospi lost nearly 1% to end at 2,318.56. The Hang Seng fell to 21,543.39. Shanghai Composite to 3.358.53. Japan has parliamentary elections this week, but more stability is expected. Stock indexes on Wall Street ended with modest gains in late afternoon action led by technology companies.

Conclusion

Inflation hurts businesses and consumers. Control has been tightened since Russia invaded Ukraine in February. The incursion sent oil prices soaring globally. And the price of gasoline in the USA has reached a record level. Consumers struggling with high prices on everything from food to clothing are cutting back on spending. Lockdowns in China also enraged supply chain issues. Wall Street has been closely following the latest economic updates to give more clues about how inflation affects the economy or if it may shift the Fed’s position on the rate rise.

Wall Street will have a closer picture of the employment market on Friday. After the government announces employment info for June. Investors are preparing for the next part of corporate earnings. Several major companies have recently warned that their financial results are being eroded by inflation among them is McCormick. In currency, the US dollar dropped to 135.22 Japanese yen. Euro amounted to 1.0259 US dollars.

The post China, HK Shares Fall on COVID-19 Situation appeared first on FinanceBrokerage.

What's your reaction?

Excited
0
Happy
0
In Love
0
Not Sure
0
Silly
0

You may also like

Leave a reply

Your email address will not be published.

More in:Latest News