Asian Shares Sink As China's 1st Quarter Growth Falters
Shares were lower in Asia after China reported Monday, April 18. 2022, that its economy expanded at a 4.8% annual pace in January-March. Benchmarks fell in Tokyo, Seoul, and Shanghai.
Photo Insert: Of all factors, China seems to have been hit hardest by its military-like COVID policy.
Hong Kong and Sydney were closed for holidays. Oil prices rose and US futures were lower. Wall Street benchmarks declined last week before closing for the Easter holiday, Elaine Kurtenbach reported for the Associated Press (AP) from Bangkok.
China’s growth has fallen well below the official target of 5.5% for 2022. In quarterly terms the economy grew 1.3% in the first quarter, compared with 1.4% in the last quarter of 2021.
Authorities have ordered shutdowns in some major cities including Shanghai to battle the country’s worst outbreaks of coronavirus since it flared into a pandemic in March 2020. But the biggest impact of the shutdowns will likely be seen in the current quarter.
US benchmark crude oil gained 92 cents to $107.87 per barrel in electronic trading on the New York Mercantile Exchange. It rose $2.70 to $106.95 per barrel on Thursday, before closing for Good Friday. Brent crude, the basis for pricing international oils rose $1.09 to $112.79 per barrel.
In currency trading, the dollar rose to 126.57 Japanese yen from 126.44 yen late Friday. The euro fell to $1.0803 from $1.0807. The Shanghai Composite index fell 0.2% to 3,203.69.
Tokyo’s Nikkei 225 index lost 1.8% to 26,596.66 while the Kospi in Seoul edged 0.2% lower to 2,691.92. Bangkok and most other regional markets declined, while Jakarta was higher, Joe McDonald also reported for AP.
“Lockdowns are going to affect data for the whole of April, and maybe even longer as more cities are also adopting measures to bring COVID under control,” ING Economics researchers said in a note.
The Russian invasion of Ukraine pushed prices for oil and other commodities sharply higher, compounding difficulties for policymakers trying to nurse along recoveries from the pandemic while also tamping down inflation that is at 40-year highs in many countries.
Central banks are raising interest rates that had stayed at record low levels to counter the devastation of the pandemic to help rein in price increases. But that can also discourage a revival in spending and investment needed to drive recoveries.