China Protests Hit Markets and Make Stocks Stumble

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Asian stock markets stumble on Monday after worsening protests in China. The government’s strict zero-COVID policy made the market crash, while India’s reached near-record highs.

In China, stocks fell sharply with the blue-chip Shanghai Shenzen CSI index dropping by 1.7%. The Shanghai Composite index was down by 1.2%. However, Hong Kong stocks lost the most, showing a 2.1% decline.

Hong Kong’s Hang Seng saw a 1.29% decline, retreating to 17,346. In addition, the Nikkei in Tokyo finished at 28,162 after tumbling 0.42%.

Over the weekend, Chinese protestors encountered the police in several major cities. The government’s zero-COVID policy obliged people to act under movement and activity curbs, which caused growing discontent.

After a dangerous and deadly fire in the country’s war fest, the last round of civil disobedience began. Sources report that the accident was worsened by the COVID measures.

China reimposed strict measures in several major cities after rising record-high daily infection counts. This raised worries that China’s economy would risk a potential slowdown and face near-term increased headwinds.

Demonstrations broke out all throughout mainland China. People let out their frustrations as measures in Beijing tightened again. COVID cases surged even though earlier this month, the country had changed some policies to avoid that from happening.

Chief market analyst at Avatrade Naeem Alsam said that the price’s primary issue is demand. He also mentioned the COVID issues in China and potential recession threats as problems for oil traders. Overall, the market saw some serious issues.

What happened in China made other markets retreat. President Tsai Ing-wen, from Taiwan, resigned after its ruling party suffered losses last week, so the country’s stocks were under pressure.

Alsam mentioned that no one wants another China lockdown. This only creates problems for the oil trade, and significant issues with its prices.

Taiwan’s Weighted index dropped by 1.2%, while South Korea’s KOSPI fell by 1.1%. Japan’s Nikkei 225 saw a 0.5% decline and Australia’s S&P/ASX 200 index lost 0.4%.

However, low-risk havens saw an increased buying this Monday, such as the dollar. Indian stocks also benefitted from China’s drop.

After a slight rise and near record-high trades, Indian stocks bucked the trend. This raised expectations that in the coming months, the Indian Reserve Bank could hike interest rates by a smaller margin.

In October, there was apparent ease of Indian inflation, so the need for more sharp rate hikes lowered. However, now bets grew.

The BSE Sensex 30 rose 0.2%, as the Nifty 50 did. Last week, the dovish Federal Reserve supported both indexes, which are now trading close to lifetime highs.

Headwinds from commodity markets and the weakening rupee have represented drawbacks for India’s economy. Even so, it’s believed to be one of the best-performing ones of the year. According to the International Monetary Fund, it has a projected growth rate of 6.8% in 2022.

After gaining a lot among their regional peers, Philippines stocks also rose by 1%. However, European stocks and the FTSE 100 also went off to a bad start this Monday.

The FTSE 100 lost 0.87% only 7,421 minutes after opening. In Germany, the DAX reached 14,541, while the CAC in Paris fell 0.56% for a total of 6,674 points.

Protests in Beijing and Shanghai were the most notable ones last weekend, and they sparked a broad commodity sale as the week opened. The US crude was below $75 per barrel, and it was the first time it ever happened in around 11 months.

Plunging to $81 per barrel, the Brent crude went down as well. In London, Shell and the oil price dropped by 2.15% and 2.27%, respectively.

Nasdaq futures, Dow futures, and S&P 500 futures all went down as European trades began.

Financial firms focused on the Asia-Pacific region also took a hit: Standard Chartered and HSBC went down by 1.76% and 1.57%.

Chinese protests also affected expectations for metal’s demand. Thus, Rio Tinto dropped by 1.34% and Anglo American lost 1.69%.

The American, holiday-shortened week due to Thanksgiving saw gains, which were present in every major index.

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