Global stocks fall after China’s zero Covid protests

Global stocks and oil prices fell Monday after protests in China over the government’s Covid-19 policies dragged sentiment and added uncertainty to the outlook for the world’s second-largest economy.

The Wall Street benchmark S&P 500 opened 0.6% lower before the New York open. The Nasdaq Composite of tech stocks fell 0.5%. The Europe region’s Stox 600 fell 0.9% and his FTSE 100 in London fell 0.4%.

Crude oil plummeted, with international benchmark Brent crude dropping nearly 3% to less than 5% annual profit. US marker West Texas Intermediate fell 1.8%.

In Hong Kong, the Hang Seng China Enterprises Index fell 1.6% after falling 4.5%. The drop in China’s CSI 300 index, which lists Shanghai and Shenzhen, was a whopping 2.8% before adjusting to just over 1%.

demonstration breaks out Over the weekend in Beijing, Shanghai and other cities, they protested against government-induced pandemic restrictions. Frustration has intensified since fires in Urumqi city last week killed 10 people, as authorities denied claims that coronavirus restrictions hampered rescue efforts and prevented residents from escaping fires. All-night vigils were urged across China.

Emmanuel Cau, head of European equity strategy at Barclays, said growing fears in China are forcing investors to do a “reality check”.

“China’s hopes of reopening were part of the bullish year-end narrative,” Kaw added. “Investors are now aware that it will not be a smooth process, whichever direction they take with COVID-19 free.”

Traders said the protests added uncertainty to China as rising coronavirus infections put pressure on local authorities to step up implementation of President Xi Jinping’s strict zero-coronavirus policy. It says.

“Investor confidence has already deteriorated this year, making it difficult to see where the market will go next,” said Luis Tse, managing director at Wealthy Securities, a Hong Kong-based brokerage firm. rice field.

Tse said investors were concerned about the lack of additional support for the Chinese economy as infections surged to a record level and fell short of gains that pushed the Hang Seng China Enterprises Index more than 17% this month.

The use of blank papers as a symbol of protest against censorship has caused problems for some publicly traded Chinese companies. Paper maker Shanghai M&G Stationery’s Shanghai-listed shares fell as much as 3.1 percent on Monday. The company said in exchange documents that statements circulating on social media claiming it had stopped selling A4 paper “to protect national security” were fake.

The turbulent outlook for the Chinese economy weighed on the yuan. China’s currency fell 1.1% against the dollar to RMB 7.24.

The U.S. dollar index, which trades in a basket of international peers, has held steady, benefiting in part from “reviving China risks,” said MUFG currency analyst Lee Hardman.

Martin Petch, vice president of Moody’s Investors Service, said the protests “could hurt credibility if they persisted and created a stronger response by authorities.”

“While this is not our base case, this has led to an increased level of uncertainty about the extent of China’s political risk, spilling over into declining confidence and reducing consumption in an already weakened economy. will spread to,” he added.

Uncertainty weighed on other Asian stocks, with Japanese benchmark Topix down 0.7% and South Korea’s Kospi down 1.2%. Global stocks fall after China’s zero Covid protests

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