China COVID crisis caused sharp falls in oil and stock markets.
High falls in oil prices and escalating COVID lockdowns in China on Monday both contributed to a recent relaxation in oil prices and sharp drops in stock markets throughout Asia.
Investors were concerned about demand in the second-largest economy in the world and the effect of escalating lockdowns on economic growth, which sent the price of Brent crude futures down 3% on the day to $81 a barrel.
The Hang Seng Index in Hong Kong fell by more than 4% in the start before settling down by roughly 2%.
Even though China’s central bank took action on Friday to increase market liquidity, equity markets throughout Asia were largely lower, with the CSI300 Index down about 2%.
Yuan declined as well.
The commodities-heavy FTSE 100 declined by 0.8% as a result of the bad attitude spreading to Europe at opening.
Market analysts have expressed concerns that the demonstrations and China’s zero-COVID policy may do more economic harm than initially thought.
According to an OECD estimate released earlier this month, China’s economic growth will drop to 3.3% in 2022 from a previous year’s rate of 8.1%.
Beijing anticipated a 5.5% rate of growth at the beginning of 2022.