After widespread protests in China against the nation’s onerous Covid-19 restrictions shook investor confidence, global markets tumbled on Monday.
Prior to trimming some of its losses, Hong Kong’s benchmark Hang Seng (HSI) Index ended the day 1.6% lower. It was down as much as 4.2% when the session began. At market closing, the Hang Seng (HSI) China Enterprises Index, which monitors the performance of mainland Chinese businesses listed in Hong Kong, fell 1.7%.
The performance of Asian shares was reflected in the general decline of European markets. The FTSE 100 (UKX), CAC 40 (CAC40), and DAX (DAX) all experienced declines of 0.5%, 0.6%, and 0.7%, respectively.
The benchmark Shanghai Composite in mainland China immediately dropped by 2.2% before cutting losses to end 0.8% lower than Friday’s close. The heavily tech-weighted Shenzhen Component Index finished 0.7% down.
The declining value of the yuan may be “the simplest barometer” for determining how domestic and foreign investors feel about China, according to Stephen Innes, managing partner of SPI Asset Management.
On Monday morning, the Chinese yuan, often known as the renminbi, declined versus the greenback. The strictly regulated domestic market’s trade in the onshore yuan saw a temporary 0.9% decline. By the afternoon, it was trading at 7.213 per dollar, down 0.5%. The exchange rate dropped 0.3% to 7.213 per dollar in international trade.
The markets have fallen as a result of huge demonstrations over China’s strict and expensive zero-Covid policy that have broken out across the country.
Residents gathered over the weekend in the largest cities in the nation, from the financial centre of Shanghai to the capital Beijing, to mourn the victims of a fire in Xinjiang, speak out against zero-Covid, and demand freedom and democracy.
Such widespread displays of rage and defiance, some of which lasted well into Monday morning, are incredibly uncommon in China. As a result of the lockdowns, economic growth has slowed and unemployment has been rising.
News Summary:
- As demonstrations over Covid lockdowns break out, China’s markets fall
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