Asian stock markets closed lower on Monday (28), pressured by risk aversion in the markets due to protests in China against the strict zero tolerance policy against Covid-19, adopted by the government of President Xi Jinping.
The episode adds a new layer of uncertainty about the Asian giant’s economy, which has recently flirted with easing restrictions.
The Shanghai Composite index closed down 0.75%, at 3,078.55 points, and the less comprehensive Shenzhen Composite dropped 0.51%, at 1,974.07 points.
In Hong Kong, the Hang Seng had a greater drop, 1.57%, to 17,297.94 points, pressured in particular by shares in the real estate sector such as Country Garden Holdings (-10.82%), which led the losses .
Technology sector papers such as JD.com (-4.33%), Alibaba (1.23%) and Baidu (-2.60%) also performed negatively.
Protests in China were sparked by a fire that killed an apartment in the city of Urumqi, in northwest China’s Xinjiang Autonomous Region. For the markets, the episode raises questions about the economic future of the Asian giant, whose internal demand has suffered due to the lockdowns🇧🇷
For Danske Bank, Beijing should not back down from its strategy before having a vaccination program ready, but the protests, if they grow, could accelerate a shift to a more lenient stance.
In response to the protests, Chinese authorities relaxed restrictions this Monday in some regions of the country, but reaffirmed their commitment to the “Covid-zero” policy. Experts linked to the fight against the disease in the US criticized Beijing’s stance, considering it lacking in transparency.
“Trying to predict reopening with any degree of certainty, with no basis or track record to go by, seems like a dangerous game in the context of the unsettling protests and colossal challenge that China’s leaders now have in their hands,” said Stephen Innes of SPI Asset. Management, in a comment.
In other markets, Tokyo’s Nikkei index fell 0.42% to 28,162.83 points, while the South Korean Kospi dropped 1.21% to 2,408.27 points. The Taiwanese Taiex scored losses of 1.50%, at 14,556.87 points, and the Australian S&P/ASX 200 dropped 0.42%, at 7,229.10 points.
Source: CNN Brasil
A journalist with over 7 years of experience in the news industry, currently working at World Stock Market as an author for the Entertainment section and also contributing to the Economics or finance section on a part-time basis. Has a passion for Entertainment and fashion topics, and has put in a lot of research and effort to provide accurate information to readers.
