- Chinese stocks plunge on renewed Covid-19 fears, Shenzhen lockdown.
- Japan’s Nikkee225 found ground on falling oil prices.
- The DXY is supported by escalating wartime tensions, upcoming Fed policy and renewed Covid-19 fears.
Markets in the Asian realm split from Chinese equities in the Asian session on renewed fears of the Covid-19 outbreak in China. The resurgence of covid in China and its containment in Shenzhen led to a massive sell-off in Chinese stocks. In response to rising Covid-19 cases, Toyota announced a suspension of production in the Chinese city of Changchun due to COVID-19 shutdown measures while Foxconn halted production at its iPhone site in the city of Shenzhen.
At press time, Japan’s Nikkei 225 jumped 1% and the Nifty 50 0.4% while the China A50 fell 2.4% and the Hang Seng 3.27%.
Japan’s Nikkie225 jumped 1% on Monday as investors cheered the recent drop in oil prices. Previously, runaway oil prices soured the mood in Asian markets. The latter is the largest importer of oil and a surge in oil prices causes margins to shrink in manufacturing and other economic activities. Oil prices plunged into $100 territory and investors breathed a sigh of relief.
Meanwhile, the US Dollar Index (DXY) is approaching 100.00 with plenty of support. The risk impulse in the market amid renewed fears of Covid-19 cases in China and Russian military activity at a major Ukrainian base near the border with NATO member Poland intensified fears of an escalation of war. Additionally, the Federal Reserve (Fed) monetary policy is Wednesday and a very likely hawkish stance from Fed Chairman Jerome Powell will further support the DXY.