Asian stocks were digesting news about growth concerns in China
and rising interest rates in the United States on Tuesday with Japan edging
marginally higher, but Hong Kong falling sharply in early trade.

Chinese growth numbers for the first quarter of 2022 exceeded
expectations on Monday but the government warned of “significant
challenges” ahead.

Shanghai, the country’s economic centre, is
in the throes of an intense Covid-19 lockdown with restrictions — which have
also hit tech hub Shenzhen and the northeastern grain basket of Jilin —
shutting supply lines.

Investors were left weighing whether attempts to lift the economy
by Chinese policymakers — who have held off cutting interest rates — would
offset Beijing’s zero-Covid policies.

“The unwillingness to loosen monetary policy further before
Covid is under control means that market sentiment will probably remain bleak
in coming weeks,” the Gavekal Dragonomics team told Bloomberg.

“However, equities will rally even harder if lockdowns lift
and policymakers start to make up for lost growth with additional easing

Japan’s Nikkei 225 made healthy gains in early trade with South
Korea, mainland China, Taiwan, and Australia all edging upward.

But Hong Kong plummeted more than 2.5% in the first hour of
trading after a four-day holiday hiatus.

The impact of monetary policy tightening in the United States to
combat inflation was another variable watched closely by investors.

Meanwhile, oil prices continued to climb as Libya’s National Oil
Corporation announced the closure of operations in major sites after staff in
the key export terminal of Zueitina and the Al-Sharara oil field were blocked
from working.

Stephen Innes at SPI Asset Management said the rise in prices
shows “just how bullishly reactive oil markets have become to supply

And the Japanese yen continued its drop against the dollar after
crossing a new 20-year low Monday, reflecting the continued accommodation of
Japanese monetary policy, while US policymakers move to hike interest rates.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 0.20% at 26,854.87

Shanghai – Composite: UP 0.10% at 3,198.84

Hong Kong – Hang Seng Index: DOWN 2.72% at 20,933.13

Euro/dollar: DOWN at $1.0767 from $1.0802

Pound/dollar: DOWN at $1.2993 from $1.3023

Euro/pound: FLAT at 82.87 pence

Dollar/yen: UP at 127.77 yen from 126.54 yen

Brent North Sea crude: UP 0.36% at $113.55 per barrel

West Texas Intermediate: UP 0.14% at $108.36 per barrel

New York – Dow: DOWN 0.1% at 34,411.69 (close)

London – FTSE 100: Closed for a holiday


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