Global growth fears fuelled by China’s harsh COVID-19 controls and a predicted string of aggressive Federal Reserve tightening drained risk appetite on Tuesday, despite a late rally on Wall Street.
After its worst day in two years on Monday, MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was up 1.1 percent by 0450 GMT, supported by China’s blue-chip index (.CSI300), which was up 1.4 percent. The benchmark Hang Seng Index (.HSI) in Hong Kong increased by 1.9 percent.
Megacorporations such as Tencent Holdings (0700.HK) and Alibaba Group boosted the tech sector (.HSTECH) by 5.3 percent. Elon Musk, the world’s richest man, announced that he had reached an agreement to buy Twitter (TWTR.N) for $44 billion in cash, which boosted investor confidence. find out more
Fears over China’s economic slowdown, on the other hand, affected Australian stocks, with the local benchmark down 2% by early afternoon, dragged down by drops in miners (.AXJO).
By early afternoon, Japan’s Nikkei stock index (.N225) had given up some of its earlier gains and was down 0.04 percent. In Asia, stock futures in the United States were slightly moved.
The lockdown in Shanghai, as well as similar incidents in other major cities such as Beijing, is dragging on the world’s No. 2 economy’s development prospects and investor mood, according to Manishi Raychaudhuri, an Asia-Pacific equities strategist at BNP Paribas.
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