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Asian Markets Gain Even As Pandemic Restrictions Tighten In China, Australia

Beijing: Asian stock markets followed Wall Street higher Monday after China and Australia tightened anti-virus controls that threaten to weigh on economic recovery.

The Shanghai Composite Index SHCOMP, +0.95% gained 0.9% and Hong Kong’s Hang Seng HSI, +0.94% gained 1%.

The Kospi 180721, 0.01% in Seoul was up less than 0.1% and the S&P/ASX 200 XJO, +0.09% in Sydney was flat. Stocks in Taiwan Y9999, -0.45% fell, while Jakarta JAKIDX, -0.14% was little changed. Markets in Japan and Singapore were closed for holidays.

China has reimposed travel controls as it tries to stop a rash of outbreaks. Australia’s two most populous states have told the public to stay home except to go to work or for a handful of other reasons.

“The right question for everyone to be asking, including financial market participants, is when lockdowns will come to other economies,” said Carl B. Weinberg of High Frequency Economics in a report. “This is central bankers’ worst nightmare coming true.”

China has cut off most access to a city of 1.5 million people, canceled airline flights and told the public to avoid travel if possible after a spate of cases tied to travelers from overseas who were infected with the delta variant.

Australia’s central bank governor, Philip Lowe, warned Friday the economy is likely to shrink in the quarter ending in September after New South Wales, where populous Sydney is located, and Victoria, with Melbourne and major companies, declared health emergencies.

On Friday, Wall Street ended at a new high after a government report showed the U.S. job market improving.

Investors have been encouraged by higher U.S. corporate profits and the global spread of coronavirus vaccinations. But the delta variant’s spread has prompted some governments to reimpose controls on business and travel.

On Friday, Wall Street’s benchmark S&P 500 index SPX, +0.17% rose 0.2% to 4,436.52. The index ended up 0.9% for the week. The Dow Jones Industrial Average DJIA, +0.41% gained 0.4% to 35,208.51 and the Nasdaq COMP, -0.40% fell 0.4% to 14,835.76.

Source: AP

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