Asian markets dipped sharply on Tuesday after Beijing reported surging COVID-19 cases leading to lockdown of its tech hub city Shenzen. Traders also priced in concerns about the war in Ukraine and imminent Federal Reserve tightening.
Beijing’s zero COVID policy lead to lockdowns in major Chinese cities are dimming economic growth outlook as well as added worries for energy and raw material demand.
Concerns about the China’s relationship with Russia lead to relentless stock selloff. Hang Seng Index Tech Index counted sharp loss amid worries on regulatory crackdown by U.S. and Chinese authorities.
The CSI300, HSI, SET and KOSPI is closed down by 4.57%, 5.72%, 0.95% and 0.91% respectively. The TOPIX close marginally in the positive by 0.79%.
Swings in the S&P 500 and Nasdaq 100 futures signaled another volatile day for U.S. equities. European benchmark index Stoxx Europe 600 fell more than 1.5%.
Ahead of Fed’s anticipated rates hike decision, U.S. 10-year treasury yield went near the highest level seen in 2019. The dollar slipped while Euros gained.
“Risk-off sentiment stemming from both the Russia-Ukraine war and the current wave of Covid-19 in China has driven equity markets sharply weaker this morning,” Siobhan Redford, an analyst at Rand Merchant Bank in Johannesburg, said in a client note.
“This has been compounded by falling commodity prices as the intersection between limited supply — given sanctions on Russia and the war in Ukraine — and a weaker demand trajectory — given further waves of the pandemic — create a perfect storm of sorts.”