Shares in China fell on signs that widespread lockdowns could become common again for the world’s second-largest economy, while oil benchmarks fell on indications that Russia might be willing to engage in more serious negotiations with Ukraine.
Hong Kong’s Hang Seng index fell 2.5% and China’s CSI 300 index of stocks listed in Shanghai and Shenzhen fell 1.2% after Shenzhen’s 17 million people were laid off. in receivership to contain an increase in cases of the Omicron variant of Covid-19.
Shenzhen’s lockdown followed similar measures in Changchun, a 9-minute city in northeast China, with cases also rising in Shanghai and a number of other major cities.
China reported more than 1,800 cases of Covid-19 on Sunday, the most daily cases in two years, as authorities struggled to contain the country’s largest coronavirus outbreak since the pandemic broke out in Wuhan at the start of 2020.
“If the lockdown is prolonged, China’s economic growth will be significantly affected,” said Raymond Yeung, chief economist for Greater China at ANZ.
Yeung said that “half of China’s GDP and population will be affected this time” and that a week-long lockdown of the affected region could reduce the country’s economic growth by about 0.1 percentage points. This year.
Elsewhere in Asia, Japan’s Topix rose 0.9% and Australia’s S&P/ASX 200 climbed 1.1% on tentative signs of movement in talks between Ukraine and Russia. Mykhailo Polodnyak, adviser to Ukrainian President Volodymyr Zelensky, said Russian negotiators “no longer issue ultimatums, but listen carefully to our proposals”.
Learn about today’s market movements