Hong Kong: Asian markets fell on Tuesday, and oil accounted for most of the previous day’s decline, as the rapidly spreading Delta Covid variable’s impact on the global recovery has exacerbated concerns that the outlook may not be as optimistic as originally hoped.
Although corporate earnings continue to be impressive, traders’ optimism has been hit after a series of lower-than-expected data for the world’s largest economies, including the key growth drivers of the United States and China.
At the same time, long-standing fears that inflation may soar in the coming months are inciting remarks that the central bank will be forced to reduce its ultra-loose monetary policy to prevent a price spiral, thus taking away the main pillar of the past more than a year— -The stock market rebounded for a long time.
“I don’t think the market is concerned about Delta as much as it’s concerned about how it impacts inflation,” Shana Sissel, of Spotlight Asset Group, told Bloomberg Television. “The longer we have Delta spread globally, the longer the supply chain disruptions will continue.”
In a sign that markets are increasingly on edge over the outlook, the yield on 10-year US Treasuries, a key gauge of growth expectations, fell below 1.2 percent. That came after US growth missed expectations and figures showed growth in factory activity slowing.
Meanwhile, Hong Kong and Shanghai continue to be buffeted by uncertainty caused by China’s crackdown on the tech, private tuition and property sectors, which has raised worries that officials will target other industries. The move has also had a limited impact on markets elsewhere, particularly tech firms.
After Monday’s rally, Asian traders gained a moderate lead from Wall Street, and all three major indexes closed in negative territory.
Hong Kong led the decline, down 1%, and technology giant Tencent fell 8%. Since China announced its crackdown a week ago, its continuous decline has expanded to around 20%. It is reported that the city government will relax travel restrictions, which may boost the fragile economy, but was shrugged.
Tokyo, Shanghai, Singapore, Seoul and Manila also posted losses.
Sydney also fell, but Afterpay, a buy-and-pay company, jumped more than 10%-soaring nearly 20% on Monday-in the US digital payment platform Square led by Twitter founder Jack Dorsey said it would After the acquisition at a price of $29 billion.
Wellington, Taipei and Jakarta rose slightly.
As several countries including China re-imposed lockdowns and other restrictive measures to raise concerns about demand, oil prices rose slightly, but only slightly offset Monday’s drop of more than 3%.
Howie Lee of OCBC Bank said: “So far this year, oil has overcome gravity, but the influence of the Delta variant has begun to limit its rise.” “It seems that oil consumption in Asia has begun to fluctuate, and prices may consolidate until A clearer picture.”