A sell-off in global stocks hit Asian markets on Tuesday after Wall Street’s steepest one-day drop since 2020, as investors worried about a slowdown in the world’s biggest economies.
Hong Kong’s Hang Seng Index fell 2.8 percent in afternoon trading after a one-day holiday. Chinese tech groups listed in the territory posted some of the steepest declines, with Alibaba falling as much as 7 percent and the Hang Seng Tech Index falling 3.6 percent.
China’s CSI 300 index of shares listed in Shanghai and Shenzhen fell 1.5 percent before recovering to rise 0.2 percent by midday.
Tuesday’s declines followed a sharp drop in global stocks the day before, with the FTSE All-World Index falling 3 percent and hitting its lowest level in more than a year.
US government bonds rallied as investors sought safe havens in response to uncertainty over how much the Federal Reserve would raise interest rates. The 10-year Treasury bond yield fell three basis points to 3 percent. Yields fall when prices rise.
Elsewhere in Asia on Tuesday, tech-heavy South Korea’s Kospi fell 2.1 percent to its lowest level since November 2020, while Australia’s S&P/ASX 200 and benchmark Japan’s Topix lost 1.2 percent and 0.2 percent, respectively.
Bitcoin fell below $30,000 for the first time since July 2021 as the world’s largest cryptocurrency by market capitalization took a hit as investors moved away from riskier assets.
Oil prices also tumbled with Brent crude, the international oil benchmark, falling 1.2 percent to $104.75 a barrel.
However, Wall Street’s slump appeared to ease on Tuesday, with Nasdaq and S&P 500 futures rising 0.5% and 0.9%, respectively.
European futures pointed to a mixed open, with the Euro Stoxx 50 up 0.2 percent and the FTSE 100 down 0.1 percent.
The losses in Asia came after grim export data from China showed growth had slowed sharply last month as weakened demand due to brutal coronavirus lockdowns continued to drag down the world’s second-largest economy. .
BlackRock last week reversed its bullish stance on China. The New York-based investment house downgraded its “modest overweight” rating on the country’s stocks and bonds to neutral on a deteriorating economic outlook despite promises of support from Beijing last month.
“We see growing geopolitical concern about Beijing’s ties with Russia. This means that foreign investors could face more pressure to avoid Chinese assets for regulatory or other reasons,” said the BlackRock Investment Institute, an internal research unit led by Jean Boivin.
“The closures are intended to reduce economic activity. China’s policymakers have announced easing to prevent a slowdown in growth, but they have yet to act fully.”
The world’s largest asset manager had been expanding its presence in China, with its think tank earlier recommending investors increase exposure to the country by up to three times. – Copyright The Financial Times Limited 2022