Asian markets, crude drop on China Covid unrest

Stocks and oil prices sank Monday on concerns about protests across China at the government’s hardline zero-Covid policy, fuelling uncertainty in the world’s number two economy, AFP reported.
China-linked stocks took the brunt of selling, with Hong Kong’s Hang Seng Index down more than three percent and Shanghai off more than one percent. The yuan was off more than one percent.
There were also losses in Tokyo, Sydney, Seoul, Singapore, Taipei and Wellington.
The prospect of a hit to demand in the world’s biggest crude importer hammered oil prices, with both main contracts down more than two percent.
The selling has taken a bit out of recent gains across markets in recent weeks sparked by hopes of a slowdown in the Federal Reserve’s interest rate hikes as inflation finally shows signs of softening.
However, some observers said the protests could provide long-term benefits as they could force President Xi Jinping to shift away from his strict, economically damaging measures sooner.
Teneo Holdings’ Gabriel Wildau said: “I don’t expect Xi to publicly admit error or show weakness, but this wave of protests could cause the leadership to decide privately that the exit needs to proceed more quickly than previously planned.”
Investors are now looking ahead to the release of US jobs data at the end of the week, which could provide clues about the Fed’s next moves, while speeches by central bank boss Jerome Powell and other key policymakers will also be pored over.