Asian Markets Begins Tumbling as China Stokes Further Rise in Infections

by Montana Fleming

China reported close to 60 news infections with a minor majority of cases being reported in the capital of the country. Stocks in Asia were lower than expected as afternoon trade resumes. In Japan, Nikkei 225 slipped and lost 1.28% while Topix index shared 0.66%. In South Korea, the Kospi dipped down 0.72%. Mainland Chinese stocks appear fleak as Shanghai Composite changed while the Shenzhen component added 0.85%.

Hong Kong’s Hang Seng index dropped 0.62%. The S&P/ASX 200 in Australia declined by 0.28%. Overall, the MSCI Asia ex-Japan index shed 0.72%. Developments surrounding the ongoing pandemic seems like a trend which are observed thoroughly by investors in order to park their investments as quoted by Rodrigo Cartril, a senior foreign exchange strategist serving in National Australia Bank.

“As economies reopen, an increase in infection rates is to be expected, the question is whether detecting measures will be efficient enough to allow for localized containment measures without having to shut the whole economy again,” he quotes.

Speaking about the recent outbreak in Hong Kong’s violent environment, Cartril quotes “I think a harsh lockdown in the way we’ve seen before is unlikely.”

Chinese economic data released on Monday for May shows a couple of hits and misses. Industrial production rose 4.4% for May. Retail sales declines 2.8% year-on-year in May which was worse than the expected 2% decrease per analysts.

Oil prices dropped in the afternoon during trading hours with Brent Crude futures dropped 2.07% to $37.93 per barrel. U.S Crude futures dropped 3.06% t0 $35.15 per barrel. The Japanese Yen trades at 107.16 per dollar following a streak of 108 per dollar since last week. The Australian dollar changes hand at $0.6824 after last week’s slip from $0.693.

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