Chinese shares fell as the reintroduction of harsh Covid-19 restrictions at the weekend raised concerns that lockdowns could once again weigh on the growth of the world’s second-largest economy.
China’s benchmark CSI 300 index of Shanghai and Shenzhen-listed stocks dropped 1.7 per cent yesterday as spooked investors dumped shares in response to the imposition of measures to halt the spread of new Covid outbreaks.
“The market sentiment is really bad,” said Dickie Wong, head of research at Kingston Securities. Wong said investors had taken fright at intensifying Covid-19 testing in China, a lockdown in Macau and additional fines imposed on Chinese tech groups over the weekend. “There’s basically no good news.”
The emergence of the highly contagious BA.5 Omicron coronavirus sub-variant in mainland China has raised concerns that cities across the country could soon be forced back into stringent lockdowns.
Shares in Chinese developers were among the worst performers in the region on Monday, with the Hang Seng Mainland Properties index falling more than 5 per cent on concerns that a rush of restrictions could undercut a nascent recovery in consumer confidence that has helped buoy real estate sales in recent weeks.
Wall Street’s S&P 500 index, which rose last week following its worst first half of the year for more than five decades, fell 1.2 per cent. The technology-heavy Nasdaq Composite was 2.3 per cent lower. Europe’s Stoxx 600 closed down 0.5 per cent.
In Europe, the regional Stoxx Europe 600 index fell 1.5 per cent in morning trading while shares on Wall Street are expected to fall when they start trading later. S&P 500 futures are down nearly 1 per cent.
Thank you for reading FirstFT Asia. Here is the rest of the day’s news — Emily
Five more stories in the news
1. Sri Lanka prime minister confirms besieged president will resign The office of Prime Minister Ranil Wickremesinghe said President Gotabaya Rajapaksa had officially informed him that he “will be resigning as previously announced”, after mass protests at the weekend sent him into hiding. The government also plans to quit once a new all-party cabinet is in place.
2. Chinese bank fraud protest turns violent after police step in Authorities have dispersed hundreds of people from the regional office of the People’s Bank of China after a rare protest over bank fraud. The protest at the weekend was the latest escalation as customers fight to recover their deposits from four small banks in Henan province after the lenders suddenly suspended online cash withdrawals in April.
3. Klarna’s valuation crashes to under $7bn Once Europe’s most valuable private tech company, Klarna has had its pricetag slashed from $46bn to $6.7bn at a difficult fundraising that highlights the crash in many tech valuations. Michael Moritz, chair of Klarna and a partner at investor Sequoia, blamed “investors suddenly voting in the opposite manner to the way they voted for the past few years”.
4. Indian court sentences tycoon Vijay Mallya to four-month jail term India’s Supreme Court has sentenced Mallya to four months in prison for disobeying a 2017 court judgment linked to the collapse of Kingfisher Airlines, a blow to the flamboyant tycoon who is seeking to stay in London. It’s been five years since Mallya was found guilty of contempt of court for allegedly transferring $40mn to his children even as bank loans to Kingfisher Airlines remained unpaid.
5. Global population growth hits lowest rate since 1950 The global population grew by less than 1 per cent a year for the first time since the aftermath of the second world war in 2020 and 2021 with Europe’s total population actually falling during the coronavirus pandemic, according to a UN report.
The day ahead
India CPI data India will release its June consumer price index. Economists expect retail inflation to hold steady at just above 7 per cent, according to a recent poll. (Reuters)
Amazon’s Prime Day The two-day event, which runs on Tuesday and Wednesday this week, is forecast to generate sales globally of more than $12.5bn — an increase of 17 per cent from last year, according to research group Insider Intelligence.
What else we’re reading
Abe killing shines spotlight on politicians’ links with Moonies For decades, close ties between the Moonies and powerful figures in the governing Liberal Democratic party have been a little-discussed open secret in Japanese politics. But Abe’s death and the suspect’s alleged family troubles with the group have shone a spotlight on the relationship as the nation seeks answers to one of its worst incidents of political violence since the second world war.
Censorship hangs over Vietnam’s film sector The country aims to attract production of more blockbusters such as Kong: Skull Island and Spike Lee’s Da 5 Bloods. But with its revised Cinema Law banning a wide catalogue of content, including films deemed to contain “reactionary ideas and social evils”, some say Vietnam has lost the plot.
Get ready for salaries to become more public Pay transparency is on the rise in the US and Europe to close the gender pay gap. But the burden should not fall on women to be more assertive about pay rises, argues Pilita Clark.
Biden seeks reset on Saudi Arabia as oil tensions flare US President Joe Biden will travel to the Middle East this week as the crisis in global oil markets pushes him to reset relations with Saudi Arabia, a country he once threatened to make a pariah state. Officials and analysts say there is an opening to repair ties between Washington and the world’s biggest crude producer.
Is the west running out of ammunition to supply Ukraine? The Ukraine war has exposed the skimpiness of western defence stockpiles — especially of unglamorous but crucial supplies such as artillery shells that have been the mainstay of fighting. Fetishes for high-tech weaponry and lean manufacturing have obscured the importance of maintaining stockpiles of basic kit, say experts.
Whether you’re relaxing alfresco at home this summer or heading out on an adventure, here’s our round-up of some of the best tech to capitalise on the good weather.
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