Asian stocks muted amid China COVID spike, tech rout

  • Stock Market News
Asian stocks muted amid China COVID spike, tech rout
Credit: © Reuters.

By Ambar Warrick Most Asian stock markets were mixed on Tuesday as recent losses invited some bargain hunting in the space, although losses in technology stocks and concerns over rising COVID-19 cases in China pressured most major bourses.

China’s blue-chip Shanghai Shenzhen CSI 300 index fell 0.1%, while the Shanghai Composite index was flat, with both indexes nursing steep losses over the past four sessions, as the country grapples with its worst COVID-19 outbreak yet.

A record-high rise in daily infections saw the reintroduction of curbs in major cities including Beijing and Shanghai. Markets feared that stricter curbs could again stifle economic growth in the country and trigger more global supply chain issues.

Technology-heavy bourses were among the worst performers on Tuesday, tracking steep overnight losses in the NASDAQ Composite . Hong Kong’s Hang Seng index slid 1.5%, while South Korea’s KOSPI fell 0.5%.

Wall Street ended weaker overnight, with technology stocks sold the most as Federal Reserve officials continued to push back against market expectations for a dovish pivot. While several members said the bank is likely to enact a smaller rate hike in the coming months, it is unlikely to pause its interest rate hikes in the near future.

This heralds more pressure on regional markets, which fell sharply this year as global monetary conditions grew tighter. Technology stocks were the worst-hit by this trend, as investors discounted future earnings from the sector.

Most Asian central banks also began hiking rates this year in order to keep pace with the Fed, and have signaled more rate hikes to counter rising inflation.

Malaysian stocks were the worst performers in Southeast Asia for a second consecutive session, falling 0.8% as a political deadlock in the wake of a hotly contested general election showed no signs of lifting.

On the other hand, Japan’s Nikkei 225 index added 0.6%, benefiting from increased optimism after Warren Buffet’s Berkshire Hathaway (NYSE: BRKa ) raised its stakes in the country’s five largest trading houses.

Australian stocks also rose 0.6%, with heavyweight bank stocks rising the most on expectations of more interest rate hikes by the Reserve Bank.

India’s blue-chip Nifty 50 index crept 0.3% higher, supported by gains in pharmaceutical and bank stocks.

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