Asian Stocks Continue To Fall Due To The War In Ukraine And The Outbreak Of COVID In China.

A man wearing a protective mask during the coronavirus disease (COVID-19) outbreak walks past an electronic board with charts (above) of the Nikkei index outside a brokerage house in Tokyo, Japan, March 10, 2022. REUTERS/Kim Kyung-Hoon.

SYDNEY, March 15 – Asian stocks were lower on Tuesday as rising COVID-19 cases in China undermined investor confidence, who are already worried about the war in Ukraine and the first U.S. interest rate hike in three years that could happen this week.

The broadest MSCI Asia-Pacific Equity Index outside of Japan (.MIAPJ0000PUS) fell 1.97% due to apparent weakness in Chinese equities. The index is down 8.2% this month.

World oil prices fell overnight as the prospect of talks between Russia and Ukraine aimed at reaching a solution eased burning fears of disruptions in energy supplies. More

Those losses extended into the Asian session, but investor focus shifted to demand as a new wave of COVID-19 infections in China clouded the outlook for the world’s second-largest economy.

More broadly, the lack of significant progress in negotiations between Ukraine and Russia on Monday added to the nervousness in stock markets, while fears are now growing over the possibility of new tensions between China and the United States.

Washington has warned Beijing against providing military or financial assistance to Moscow after its invasion of Ukraine as sanctions against Russian political and business leaders tighten. More

“The question we are asking is whether the markets have peaked in bearishness,” said Jack Siu, chief investment officer at Credit Suisse in Greater China.

“We know there has been a lot of bad news, it could have been worse, stock prices have dropped substantially and there is no clarity on any US regulatory action on Chinese equities.”

Hong Kong’s Hang Seng Index (.HSI) remained in negative territory on Tuesday, falling 4% after selling off nearly 5% a day earlier. Hong Kong’s main market fell 17% in March.

The city’s tech index (.HSTECH) has fallen hard, falling nearly 30% this month as investors worry about more regulatory action from US and Chinese authorities in the sector.

China’s CSI300 (.CSI300) fell 1.78%, pushing its monthly losses to 11.2%. Australian shares (.AXJO) closed down 0.73%.

However, despite weakness in Asia, S&P 500 stock futures edged up 0.21%, while Tokyo’s Nikkei (.N225) bounced back slightly, gaining 0.22%.

Adding to the general negative market sentiment is a rise in COVID-19 cases in China, which investors fear will hurt mainland China’s economic growth in the first quarter. More

China on Tuesday reported 3,602 new confirmed cases of the coronavirus, up from 1,437 on Monday. Read more.

During the Asian session, oil in the US fell another 5.2% to $97.66 per barrel. Brent crude fell 5.16% to $101.37 per barrel. More

“Now everyone looks at the Chinese cases and understands that this should affect production,” said Hong Hao, head of research at BOCOM International.

“China’s growth in the first quarter could be closer to zero than 5.5%. There is a ripple effect. There is Ukraine, the risk of US sanctions against China and the rise of COVID cases inside China – it doesn’t look good.”

Also in the focus of investors’ attention is the US Federal Reserve, which meets on Wednesday and is expected to raise interest rates for the first time in three years to offset rising inflation.

Wall Street had a mixed session, with the fall in tech stocks causing most indexes to close lower on Monday. More

The benchmark 10-year Treasury yield rose to 2.1384%.

The two-year yield, which is rising on traders’ expectations of higher Fed fund rates, hit 1.865%, up from 1.849%.

Gold also fell in Asia, with a spot price of $1,932.1 an ounce.

Reporting by Scott Murdoch in Sydney; Editing by Sam Holmes

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