Markets have been spooked by the prospect of the severe Shanghai lockdown – now in its fourth week – being extended to Beijing as one district in the Chinese capital is sealed off following a few dozen positive Covid tests, prompting panic buying. Reuters has more.
Asian markets suffered their worst session in over a month overnight as worries that Beijing could soon be back in lockdown sent Chinese shares back to 2020 lows, and as the effects of Wall Street’s 2.5% slump on Friday lingered…
MSCI’s broadest index of world shares slid 0.7% to a six-week low. Oil fell over 4% in commodity markets and the worries about Beijing saw the Chinese yuan skid to a one-year low.
State television in China reported that residents were ordered not to leave Beijing’s Chaoyang district on Monday after a few dozen Covid cases were detected over the weekend.
The China-sensitive Australian dollar fell as much as 1.2% while the U.S. dollar climbed unhindered to a two-year high, hitting $1.0707 against the euro and 1.2750 versus Britain’s pound.
Much focus on is on how fast and far the Federal Reserve will raise U.S. interest rates this year and whether it will, along with all the other global worries, tip the world economy into recession.
The Ukraine crisis, with its extensive sanctions on Russia and boycotts of Russian energy, have added to the woes, alongside the colossal borrowing of the past two years to fund Covid lockdowns, leading to one of the worst starts to the year on record for the world stock markets.