SINGAPORE — Mainland Chinese indices led losses as Asia-Pacific markets fell sharply on Monday after a sell-off on Wall Street on Friday.
The Shenzhen component fell 6.08% to 10,379.28 while the Shanghai composite declined 5.13% to 2,928.51.
“It’s not a surprise and it makes perfect sense that the market should be concerned about the Covid situation because it’s clearly affecting economic activity. It’s affecting earnings potential for many parts of the market,” said Timothy Moe, head of Asia. -Peaceful. equity strategist at Goldman Sachs.
China has been struggling to contain its worst outbreak of the virus despite tough lockdowns in its largest city, Shanghai. Over the weekend, the capital Beijing warned that the virus has been spreading undetected for about a week.
He said there is a lot of political support on the way, especially on infrastructure spending, but that can’t happen when the economy is in lockdown.
“That’s why the market is very focused on short-term issues regarding Covid,” he told CNBC’s “Street Signs Asia.”
Hong Kong’s Hang Seng Index fell 3.57% at the end of the day while the Hang Seng Tech Index fell 4.43%. Shares of Chinese video company Bilibili fell 5.24% in Hong Kong, and Hong Kong-listed shares of Alibaba fell 4.96%.
Japan’s Nikkei 225 fell 1.9% to 26,590.78, while the Topix fell 1.5% to 1,876.52. Nissan shares closed down 5.05% on a Bloomberg report that Renault may sell part of its stake in the Japanese company to focus more on electric vehicles.
In South Korea, the Kospi fell 1.76% to 2,657.13 and the Kosdaq fell 2.49% to 899.84. Shares of Hyundai Motor rose to close 1.11% higher after the company reported a 16.8% rise in first-quarter net profit compared to the same period in 2021.
The Australian and New Zealand markets are closed on Monday for a holiday.
US stock futures fell slightly after a sell-off on Friday, when the Dow Jones industrial average plunged more than 900 points. The S&P 500 closed down 2.8% at 4,271.78, its worst day since March. The Nasdaq Composite fell 2.6% to 12,839.29.
MSCI’s broader index of Asia-Pacific stocks outside of Japan fell 2.39%.
On the economic data front, Singapore reported that its core inflation rate rose 2.9% in March compared to a year ago, the fastest pace in a decade.
The increase was driven by higher inflation in food and services, officials said. A Reuters poll of analysts forecast core inflation to grow 2.4%.
Chinese telecommunications company ZTE will report its earnings on Monday.
Oil down 3%
US crude futures fell 3.79% on Monday to trade at $98.20 a barrel. International benchmark Brent crude futures fell 3.8% to $102.60 a barrel.
China’s Covid situation, global GDP and the war in Ukraine are all variables affecting the oil price outlook, said Dan Yergin, vice president of S&P Global.
“No one knows at the moment, because there are all these factors that are different from normal supply and demand,” he told CNBC’s “Street Signs Asia.”
The US dollar index, which tracks the dollar against a basket of its peers, was at 101.612.
The Japanese yen was last trading at 128.07 per dollar. It crossed the 129 level last week before strengthening slightly. The Australian dollar was at $0.7162, down slightly from last week.
— CNBC’s Evelyn Cheng, Sarah Min and Yun Li contributed to this report.