Wednesday, February 28, 2024
27 C
Brunei Town

World shares mixed, Hong Kong index dives 5.4pc

BANGKOK (AP) – World shares were mixed yesterday while Hong Kong’s Hang Seng index plunged five per cent after the neighbouring city of Shenzhen was ordered into a shutdown to combat China’s worst COVID-19 outbreak in two years.

Benchmarks rose in Frankfurt, Paris and Tokyo and United States (US) futures were higher. Oil prices retreated against the backdrop of uncertainty from the war in Ukraine.

Germany’s DAX advanced 1.8 per cent to 13,879.27, while the CAC 40 in Paris picked up 0.6 per cent to 6,293.04. Britain’s FTSE 100 was almost unchanged at 7,152.08.

The future for the Dow Jones Industrial Average rose 0.7 per cent, auguring a positive start for the week’s trading. The S&P 500 future was 0.5 per cent higher.

The spreading virus outbreaks in China are compounding worries over supply chain disruptions both from the pandemic and from the war.

A vital manufacturing and technology hub of 17.5 million people, Shenzhen is home to some of China’s most prominent companies, including telecom equipment maker Huawei Technologies Ltd, electric car brand BYD Auto, Ping An Insurance Co and Tencent Holding, operator of the popular WeChat message service.

A woman walks past a bank’s electronic board showing the Hong Kong share index in Hong Kong. PHOTO: AP

The Hang Seng index dipped 5.4 per cent but regained some lost ground to close five per cent lower at 19,531.66. The exchange’s tech index dropped 11 per cent.

The Shanghai Composite index slipped 2.6 per cent to 3,223.53. The A-share index in Shenzhen’s smaller market lost 2.9 per cent.

Authorities have restricted access to Shenzhen by suspending bus service and said everyone in the city will undergo three rounds of testing after 60 new cases were reported on Sunday.

All businesses except those that supply food, fuel and other necessities were ordered to close or work from home.

Infection numbers in mainland China are low compared with other countries and with Hong Kong, which reported more than 32,000 new cases on Sunday. But Beijing’s “zero tolerance” strategy has led to lockdowns of entire cities to find and isolate every infected person.

In other Asian markets, Tokyo’s Nikkei 225 index rose 0.6 per cent to 25,307.85 and the S&P/ASX 200 in Australia gained 1.2 per cent to 7,149.40. South Korea’s Kospi lost 0.6 per cent to 2,645.65.

The Ukraine crisis and central bank efforts to fight inflation remain the focus for most markets.

Russia’s military forces were keeping up their campaign to capture Ukraine’s capital as residents of other besieged cities held out hope that renewed diplomatic talks might open the way for more civilians to evacuate or emergency supplies to reach them.

A fourth round of talks was held yesterday between Ukrainian and Russian officials to discuss getting food, water, medicine and other desperately needed supplies to cities and towns under fire, among other issues, Ukrainian presidential aide Mykhailo Podolyak said.

Last Friday, the S&P 500 fell 1.3 per cent and the Dow industrials lost 0.7 per cent. The Nasdaq composite index gave up 2.2 per cent and the Russell 2000 index of smaller companies slipped 1.6 per cent.

World markets have been rocked by dramatic reversals as investors struggle to guess how Russia’s invasion of Ukraine will affect prices of oil, wheat and other commodities produced in the region.

That’s raising the risk the US economy may struggle under a toxic combination of persistently high inflation and stagnating growth. The Federal Reserve is expected to raise interest rates at its meeting this week as it and other central banks act to stamp out the highest inflation in generations, while trying to avoid causing a recession by raising rates too high or too quickly.

US stocks are about 10 per cent below peaks hit earlier this year, while crude oil prices are more than 40 per cent higher for 2022.

US benchmark crude oil lost USD3.13 to USD106.20 per barrel in electronic trading on the New York Mercantile Exchange. It surged USD3.31 per barrel last Friday to USD109.33 per barrel.

Brent crude oil, the standard for international pricing, declined USD2.63 to USD110.04 per barrel.

The US dollar rose to JPY117.71 from JPY117.35. The euro strengthened to USD1.0959 from USD1.0926.