Hong Kong’s Hang Seng (HSI) benchmark fell nearly 4%, a leading loss in Asian markets, and is set to record its worst daily decline in more than a month. Technical stocks sold sharply, with the Hang Seng Tech index down 5%. Mainland China’s Shanghai Composite Index (SHCOMP) and its high-tech counterpart, the Shenzhen Component Index, fell 2.3 percent. Korea’s Kospi (KOSPI) and India’s Sensex fell more than 1%. Japan’s Nikkei (N225) opened lower, but reversed losses later in the day. Last increased by 0.9%.
In the foreign exchange market, the Chinese yuan also fell against the US dollar, reaching its lowest level in a year and a half. It was trading at $ 6.73 on the offshore market around 9:45 a.m. Hong Kong time. By noon, it had reduced losses and was trading at 6.71.
The Japanese yen weakened against the greenback to 130.6 per dollar. The Korean won also fell, trading around 1274 per dollar.
The collapse in Asia comes after US markets fell sharply on Thursday, marking their worst day of the year and gutting all of Wednesday’s gains.
In addition to the impact of Wall Street, Asian investors are also worried after recent comments from China’s top leadership.
On Thursday, President Xi Jinping said at all levels of government to “resolutely adhere” to the country’s policy of zero Covid. He made remarks during a meeting with the Standing Committee of the Politburo of the Communist Party, the nation’s highest decision-making body.
Officials at all levels of government must “resolutely fight against all words and actions that distort, doubt and deny China’s policy of controlling Covid,” Xi said.
“This may hamper some hopes for a change in Covid-19 policy, which suggests that the economic recovery will remain prolonged and uneven,” Yep Jun Rong, market strategist at financial services firm IG Group, wrote on Friday.
China’s zero-Covid policy has severely affected the world’s second-largest economy. In April, the country’s giant services sector contracted at the second-fastest pace in history as the Covid blockade hit business hard. Its manufacturing sector also shrank last month, sending the economy back.
Nicole Goodkind of CNN Business contributed to this report.
Add Comment