Global alert on the increase of infections in China
- This year has been very turbulent for the global economy due to inflation, the war in Ukraine, rising energy prices, etc…. In addition, another crucial issue related to Asia is still scaring investors: Covid in China.
- Markets have been waiting all year for the world’s second largest economy to fully open, but the increase in Covid cases over the last few weeks and China’s « Zero-Covid » policies are greatly weakening the global economy.
News from China has stained the main Asian stock markets red, with Hong Kong being one of the hardest hits. The only stock market index that has managed to withstand the blow of the Chinese covid has been the Japanese Nikkei, thanks to investments made by Warren Buffet in several companies.
Within Europe, one of the most affected is the DAX, which stands out because of the car factories German automotive companies have in the Asian country. In the US, companies such as Apple and Tesla have started the week with declines in the stock market due to the important role of China’s production. In addition, as China is world’s main oil importer, these restrictions have led to a fall in Brent’s and West Texas Intermediate’s prices.
- Source: Financial Times