March 31, 2022
Asia’s investors were in a downbeat mood over dismal figures from China, Covid lockdowns and a lack of progress in Ukraine peace talks
Asian stocks struggled on Thursday, failing to rise after hopes of progress on a Russia-Ukraine peace deal were dashed by Moscow.
Oil prices tumbled on reports that the United States is looking at tapping into its reserves to combat a supply crisis sparked by the Ukraine war.
And China stocks closed down after data showing activity in the country’s factory and service sectors had swung into negative territory in March, raising worries over the impact of recent Covid-19 restrictions.
The world’s second-largest economy is now at the risk of slowing sharply as authorities restrict production and mobility in many cities, including Shanghai and Shenzhen, to stamp out fresh Covid outbreaks.
“Markets so far have underestimated the severity of the situation in China because it is difficult to fully reconcile and understand,” Nomura analysts said in a note. “In the next couple of months, we expect global investors to better reflect these shocks in their valuations of various asset classes.”
China will rollout promised policies to stabilise the economy as soon as possible, as downward pressure on the economy has increased, state media CCTV quoted a cabinet meeting as saying on Wednesday.
The blue-chip CSI300 index fell 0.7% to 4,222.60, while Hong Kong stocks also ended in negative territory. The Hang Seng Index fell 1.06%, or 235.18 points, to 21,996.85.
The Shanghai Composite Index fell 0.44%, or 14.39 points, to 3,252.20, while the Shenzhen Composite Index on China’s second exchange slipped 0.92%, or 19.66 points, to 2,117.96.
Nifty 50 in Retreat
Tokyo shares closed lower too with the benchmark Nikkei 225 index giving up 0.73%, or 205.82 points, to end at 27,821.43, while the broader Topix index fell 1.08% , or 21.20 points, to 1,946.40.
And Indian stocks edged back with Mumbai’s signature Nifty 50 index down 0.19%, or 33.50 points, to close at 17,464.75.
European stocks were little changed on Thursday, holding near recent one-month highs but set for the biggest quarterly drop since the start of 2020.
Brent crude futures were down 3.7% at $109.28, while US West Texas Intermediate futures were down 4.7% at $102.76.
Dollar vs Yen Stabilises
The MSCI World Equity index was down 0.2% on the day, while Europe’s STOXX 600 also slipped 0.1%, just below the one-month high it hit on Tuesday.
The STOXX 600, meanwhile, was on track for a 5.8% drop in the first quarter of 2022, its biggest quarterly fall since it plunged 23% in the first quarter of 2020.
The dollar was little changed against the yen, with the pair at 121.935, having stabilised after the yen fell to its lowest since 2015 on Monday on expectations that the Bank of Japan would be markedly more dovish than the Fed.
Gold edged lower, but was still set for its biggest quarterly rise since September 2020.
Bitcoin was little changed at around $47,132.
Key figures around 0810 GMT
Tokyo – Nikkei 225 > DOWN 0.7% at 27,821.43 (close)
Hong Kong – Hang Seng Index > DOWN 1.1% at 21,996.85 (close)
Shanghai – Composite > DOWN 0.4% at 3,252.20 (close)
West Texas Intermediate > DOWN 4.5% at $102.98 per barrel
Brent North Sea crude > DOWN 4.1% at $108.85 per barrel
New York – DOW > DOWN 0.2% at 35,228.81 (Wednesday close)
- Reuters with additional editing by Sean O’Meara