China, Australia Stocks Rattled by new COVID Lockdown
2022.08.12 07:30
By Ambar Warrick
Investing.com– Chinese and Australian stocks fell on Friday as a COVID-19 lockdown in commodities hub Yiwu rattled sentiment, while most other Asian stocks trended higher on more signs of easing U.S. inflation.
As of 23:32 ET (03:32 GMT), China’s bluechip Shanghai Shenzhen CSI 300 index fell 0.2%, while the Shanghai Composite index fell in a similar band.
Sentiment towards the country was dealt a new blow by a three-day lockdown in Yiwu, a major commodity and manufacturing hub in the Zhejiang Province. The city was placed in a partial lockdown earlier this week, and was put in a complete lockdown on Thursday, The South China Morning Post reported.
China’s economy is still reeling from a series of economically damaging COVID lockdowns imposed earlier this year, with investors wary of any more such measures. A lockdown in a major commodity hub like Yiwu could spell more trouble for China’s beleaguered industrial sector, which unexpectedly shrank in July.
Manufacturing stocks were among the worst performers on the bluechip index on Friday.
Australian stocks fell 0.8% on the news, given that several major miners in the country depend on China as an export destination. BHP Group Ltd (ASX:BHP), the world’s largest miner, dropped 0.7%, while Rio Tinto Ltd (ASX:RIO) traded flat.
Most other Asian stocks rose on Friday, as more signs of a slowdown in U.S. inflation boosted sentiment. Data on Thursday showed the producer price index (PPI) unexpectedly shrank in July, a day after another reading showed the consumer price index (CPI) sank more than expected.
Still, gains were tempered by hawkish comments from Federal Reserve officials, who posited that interest rates could rise by as much as 1% by the end of the year.
Japan’s Nikkei 225 index rallied 2.5% in catch-up trade after a holiday on Thursday. Hong Kong’s Hang Seng index added 0.2%.
Malaysian stocks rose 0.2%, after data showed the country’s economy grew 8.9% in the second quarter, far more than expectations of 6.7%.
