Asia stocks slide on China COVID protests, India near record highs

By Ambar Warrick 

Investing.com– Most Asian stock markets slumped on Monday amid worsening protests in China against the Government’s strict zero-COVID policy, while Indian stocks traded near record highs as markets positioned for smaller interest rate hikes in the country. 

Chinese stocks fell sharply, with the blue-chip index down 1.7%, while the index lost 1.2%. Hong Kong stocks were the worst performers in Asia with the logging a 2.1% decline. 

Chinese protestors in several major cities over the weekend, amid growing discontent with movement and activity curbs under the government’s strict zero-COVID policy. A deadly fire in the country’s far west, which was reportedly worsened by lockdown measures, triggered the latest, albeit unprecedented, round of civil disobedience.

The civil unrest comes as record-high daily infection counts saw China reimpose strict curbs in several major cities. This raised concerns that the Chinese economy could face increased headwinds in the near-term and risk a potential slowdown.

Other China-exposed markets retreated on this notion. South Korea’s index shed 1.1%, while the index fell 1.2%. Taiwan stocks also came under pressure after President Tsai Ing-wen after it suffered losses in a local election last week. 

Australia’s index fell 0.4%, while Japan’s index dropped 0.5%. Low-risk havens such as the saw increased buying on Monday.

Bucking the trend, Indian stocks rose slightly and traded near record highs amid growing expectations that the will hike interest rates by a smaller margin in the coming months.

Bets on such a scenario grew after appeared to have eased substantially in October, lowering the need for more sharp rate hikes.

The blue-chip index rose 0.2%, as did the benchmark . Both indexes were trading close to lifetime highs, also taking support from dovish Federal Reserve signals last week.

Despite a weakening and headwinds from commodity markets, the is poised to be one of the best-performing economies this year, with a projected growth rate of 6.8% in 2022, according to the International Monetary Fund. 

also outperformed, jumping 1% after gaining the most among their regional peers last week.  

Most Asian stocks rose over the past two weeks as investors piled into risk-heavy assets on the prospect of by the U.S. Federal Reserve.

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