Asian markets mixed as China expands COVID restrictions


BEIJING — Asian stock markets were mixed Tuesday after Wall Street sank and Chinese anti-virus controls fueled concern about an economic slowdown.

Wall Street’s benchmark S&P 500 index declined for another day after a Federal Reserve official rattled investors last week by saying already-elevated interest rates might have to go higher than expected to stop surging inflation.

In China, expanding restrictions on millions of people in multiple cities to fight virus outbreaks are adding to concern the world’s second-largest economy might weaken.

“Fears over China’s COVID situation are putting pressure on the global outlook for demand,” Anderson Alves of ActivTrades said in a report. “Positioning for an upside for Chinese stocks will have to wait longer.”

The Nikkei 225
NIK,
+0.68%

in Tokyo rose 0.7%. The Hang Seng
HSI,
-0.39%

in Hong Kong sank 0.4% while the Shanghai Composite Index gained 0.8%.

The Kospi
180721,
-0.35%

in Seoul shed 0.4% while Sydney’s S&P/ASX 200
XJO,
+0.70%

gained 0.7%. Benchmarks in Singapore
STI,
+0.51%
,
Taiwan
Y9999,
+0.46%

and Indonesia
JAKIDX,
+0.08%

gained.

On Wall Street, the S&P 500
SPX,
-0.39%

fell 0.4% to 3,949.94. The Nasdaq composite
COMP,
-1.09%
,
dominated by tech stocks, dropped 1.1% to 11,024.51. The Dow Jones Industrial Average
DJIA,
-0.13%

edged down 0.1% at 33,700.28.

Concerns about China’s economic activity rose after the major cities of Guangdong and Shijiazhuang ordered millions of residents to stay home and other cities including the capital, Beijing, closed stores and tightened restrictions on travel and other activity.

China’s ruling Communist Party promised this month to reduce the economic impact of its “Zero COVID” strategy, which aims to isolated every case, by changing quarantine and other rules. But an upsurge in cases is challenging that as cities close businesses or tell factory operators to isolate their workforce from contact with outsiders.

Casino operator Wynn Resorts
WYNN,
-2.18%
,
which depends on Chinese gamblers visiting the southern territory of Macao for a big share of its revenue, fell 2.2%. Las Vegas Sands
LVS,
-2.87%
,
which also operates casinos in Macao, slid 2.9%.

Bond yields fell. The yield on the 10-year Treasury, which influences mortgage rates, slipped to 3.82% from 3.83% late Friday.

U.S. markets close Thursday for the Thanksgiving holiday and have a shortened trading day Friday.

On Wednesday, the Fed is due to release minutes from its latest meeting, which might give investors more insight into plans to fight inflation that is near a four-decade high.

Traders worry unusually large rate hikes by the Fed and other central banks this year might tip the global economy into a recession.

They expect the Fed to raise rates again at its December meeting but by one-half percentage point after four hikes of 0.75 percentage points, three times its usual margin.

The president of the St. Louis Federal Reserve Bank, James Bullard, dashed hopes the Fed might be easing off rate hike plans. He suggested the U.S. central bank’s key lending rate might need to rise to 5% to 7% before inflation is under control. That would be almost double the current range of 3.75% to 4%, up from close to zero in March.

In energy markets, benchmark U.S. crude
CLZ22,
-0.42%

gained 29 cents to $80.33 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude
BRNF23,
+0.46%
,
the price basis for international oil trading, advanced 38 cents to $87.83 per barrel in London.

The dollar
USDJPY,
-0.31%

declined to 141.77 yen from Monday’s 142.17 yen.



Read More: Asian markets mixed as China expands COVID restrictions

2022-11-22 04:27:00

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