China Covid-19 Protests Push Stocks and Oil Down

Hong Kong shares fell 2%, offshore yuan weakened against the USD, while oil prices plunged to the lowest level in a year

China COVID-19 stocks

People in China protest against the country’s continued lockdowns and zero-Covid policy. Source: pexels.com

As people in China protest against the country’s continued lockdowns and zero-Covid policy, financial markets are deeply impacted by the unrest.

The Hang Seng index in Hong Kong fell 4% but regained a bit of its value during the day, now trading 2.3% lower. Both Shanghai Composite  and the Shenzhen Component also fell between 1.1%-1.3%.

One of the sharpest losses was seen in the tech sector. Besides, EV-makers and property stocks decline also dented the wider index in Asia’s morning session.

Meanwhile, oil futures reached new 2022 lows due to the renewed demand concerns. Benchmark West Texas Intermediate crude futures fell by over $2, reaching the lowest levels since Dec. 2021. WTI’s price fell as low as $73.86 per barrel. Besides, Brent crude futures also slipped to $81.16 per barrel. However, both futures regained some of their value during the following trading hours. 

In addition, the offshore yuan weakened sharply against the dollar. 

As for individual stocks, tech giants like Tencent and NetEase lost about 2% in the first hour of trade. Alibaba and Xiaomi lost even more – 3% and 2.6%, respectively. EV stocks such as Li Auto declined over 3%, while property stocks lost between 5% and 8% of their value. 

At the same time, Hong Kong-listed casino stocks jumped as Macao renewed concessions for its casino operators for 10 more years. MGM China and Wynn Macau both earned more than 13% in the first hour of the session.

As the Chinese yuan weakens, global currencies are also at risk, because supply chains may be affected. Besides, if they get further disrupted, traders will be trying to reduce their exposure to further risk.

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