Asia report: China leads losses as Covid-19 outbreak spreads
By Josh White
Date: Monday 25 Apr 2022
(Sharecast News) - Stocks in China led losses in Asia on Monday, as sentiment was further hit by ongoing Covid-19 lockdowns in and around Shanghai, following a stateside sell-off on Wall Street on Friday.
In Japan, the Nikkei 225 was down 1.9% at 26,590.78, as the yen strengthened 0.33% on the dollar to last trade at JPY 128.08.
It was a heavily negative day for the benchmark's major components, with automation specialist Fanuc down 1.12%, fashion firm Fast Retailing losing 5.27%, and technology conglomerate SoftBank Group plummeting 7.8%.
Carmaker Nissan slid 5.05%, after Bloomberg reported that French auto giant Renault could sell its stake in Nissan to focus on electric cars.
The broader Topix index lost 1.5% by the end of trading in Tokyo, closing at 1,876.52.
On the mainland, the Shanghai Composite tumbled 5.13% to 2,928.51, and the smaller, technology-heavy Shenzhen Composite plunged 6.48% to 1,790.03.
China's economic heart in Shanghai was plunged into strict social and trading restrictions several weeks ago as the country's worst Covid-19 outbreak since the start of the pandemic emerged.
Over the weekend, authorities in the capital Beijing warned that the virus had been spreading undetected in that city for at least a week, after a spike in cases.
Parts of Beijing were placed under mass testing requirements on Monday, which is what also took place in Shanghai before lockdowns were implemented, although only specific residential buildings were locked down in Beijing thus far.
South Korea's Kospi was off 1.76% at 2,657.13, while the Hang Seng Index in Hong Kong lost 3.73% to 19,869.34.
The blue-chip technology stocks were on the back foot in Seoul, with Samsung Electronics down 1.04% and SK Hynix losing 2.26%.
Hyundai Motors was up 1.11%, meanwhile, after the company reported a 16.8% improvement in first quarter net profit year-on-year.
"Market moods have deteriorated as the Covid situation in China is not improving," said XTB chief market analyst Walid Koudmani.
"The media is hinting that Beijing could be next in line for a lockdown after Shanghai and several other major cities.
"Furthermore, as China is the second largest economy in the world, the situation also has a big impact on commodity markets with oil and industrial metals dropping significantly today."
Oil prices were lower at the end of the Asian day, with Brent crude futures last down 4.82% on ICE at $101.51 per barrel, and the NYMEX quote for West Texas Intermediate losing 4.86% to $97.11.
Traders in both Australia and New Zealand were off as markets were closed on both sides of the Tasman Sea for ANZAC day.
The down under dollars were both weaker against the greenback, with the Aussie last off 0.97% at AUD 1.3939, and the Kiwi retreating 0.36% to NZD 1.5123.
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