HONG KONG, China—Asian stocks fell on Monday as investors remained anxious over inflation and the ongoing impact of China’s COVID lockdown policies, despite an initial Wall Street bounce thanks to a solid US jobs report.
Global markets have taken a beating over a series of crises including surging inflation, rising interest rates, China’s economic slowdown and the war in Ukraine.
Investors were given more bad news on Monday as China’s April exports slumped to their lowest level in almost two years, due to Beijing’s strict zero-COVID policy which has pushed millions under lockdowns and halted manufacturing hubs.
Exports plunged to 3.9 percent on-year, while imports were stagnant for April.
Chinese customs spokesman Li Kuiwen tried to strike an upbeat note by saying the economy still had room to make a turnaround but experts were less optimistic.
“Asian equities are down heavily in the red today as regional markets react to tightening COVID-19 restrictions in China and fears of a prolonged slowdown in the world’s second-largest economy,” Jeffrey Halley, a senior market analyst at OANDA Asia Pacific, said.
Lockdowns across dozens of Chinese cities—from the manufacturing hubs of Shenzhen and Shanghai to the breadbasket of Jilin—have wreaked havoc on supply chains over recent months, crushing small businesses and trapping consumers at home.
The jitters reverberated across Asian equities Monday, tanking in Australia, Singapore and Seoul. Tokyo’s Nikkei index closed down more than 2.5 percent, while China’s two mainland indices—Shanghai and Shenzen—saw a slight bump throughout the day.
Hong Kong stock exchanges were closed for a public holiday.
Markets were briefly lifted by a solid US jobs report released Friday. The US Labor Department had announced that the world’s largest economy added a better-than-expected 428,000 jobs in April, with the unemployment rate remaining at a low 3.6 percent.
But any uptick was short-lived, as the United States’ fierce monetary tightening has continued to send traders running for the hills.
The Federal Reserve hiked borrowing costs by half a percentage point last week—the most since 2000.
Wall Street’s S&P 500 dropped 0.6 percent, while the other two US indices had also dipped by close of Friday. Nasdaq suffered the most at 1.5 percent.
The losses globally capped a volatile week, and markets are bound to remain “messy,” said Diana Mousina, a senior economist at AMP Investments.
“There may be more downside as markets worry about a significant economic slowdown or ‘hard landing’ and aggressive interest-rate hikes,” she wrote in a note according to Bloomberg.
Oil is also fluctuating, with crude rebounding Friday after key producers led by Saudi Arabia and Russia refused to lift output more than their planned marginal increase as they weighed tight supply concerns caused by Moscow’s invasion of Ukraine.
But Sunday saw a meeting between the G7 club of wealthy nations, who pledged to phase out or ban the import of Russian oil to put pressure on Moscow. With AFP