HONG KONG, July 11(ABC): Asian markets and oil prices mostly fell Monday with a fresh Covid flare-up in Shanghai fanning fears of another economically painful lockdown in China’s biggest city.
The news came after a forecast-busting US jobs report last week indicated the world’s top economy was coping so far with the Federal Reserve interest rate hikes, giving it room for more as it battles soaring inflation.
Traders are also keeping tabs on developments in Washington as President Joe Biden weighs removing some of the Donald Trump-era tariffs on Chinese goods worth hundreds of billions of dollars.
Shanghai recorded more than 120 virus cases at the weekend, having seen its first case of the highly contagious BA.5 Omicron strain, forcing officials to launch another mass testing drive.
With China fixated on its zero-Covid strategy of wiping out the disease, there is increasing concern that authorities will revert to another painful lockdown, with Shanghai residents having only emerged from a two-month confinement in June.
There have also been new infections uncovered in other parts of the country, including Beijing.
Data this week will provide a fresh update on the economic impact of those measures, as well as similar strict controls in Beijing.
The prospect of another lockdown sparked a sell-off in Hong Kong and Shanghai, while there were also losses in Sydney, Seoul, Taipei, Manila, Jakarta and Wellington.
However, there were gains in Tokyo as traders welcomed Japan’s ruling bloc securing a strong win in Sunday’s upper house election, held days after the assassination of former premier Shinzo Abe.
The result should provide the government with some stability, while there were also hopes for a cabinet reshuffle and economic stimulus.