Asian markets, crude drop on China Covid unrest

Asian markets mixed as traders weigh Li remarks, Fed minutes


HONG KONG: Asian markets were mixed on Thursday, with minutes showing a less hawkish Fed, but offset by China’s overarching warning that the world’s second-largest economy is in some ways worse than the early days of the pandemic.

Traders shrugged off the storm as they digested Li Keqiang’s warning, while China insisted on a zero-coronavirus policy to eradicate the fast-spreading variant of the Omicron virus.

The economic pain caused by the lockdown and other strict containment measures has hit growth in China and sent shockwaves around the world as key supply chains come to a standstill.

Data in recent weeks have shown a series of promises from Beijing to kickstart growth largely unfulfilled due to a lack of concrete action, while analysts say easing of coronavirus policy is the only thing investors want to see.

“China’s economic indicators have dropped significantly, and difficulties in some aspects and to a certain extent are greater than in 2020 when the outbreak was severe,” Li Keqiang said at an emergency meeting with representatives of local governments, state-owned enterprises and financial institutions on Wednesday.

He also urged officials to work to reduce unemployment.

Commentators generally agree that China’s economic growth will be well below the government’s target of around 5.5%. The expansion rate for 2020 is 2.2%.

“Following very weak growth in economic activity in April, a sluggish recovery so far in May and persistently rising unemployment, Chinese policymakers are more urgent to support the economy,” said Goldman Sachs economists.

Both Hong Kong and Shanghai were lower in early trade, as was Sydney. Seoul, Singapore, Manila and Wellington edged higher, while Tokyo and Taipei were flat.

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