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Fears of a new COVID outbreak in China sent Australia’s materials sector slumping and saw the Aussie dollar fall to three-week lows, as Hong Kong’s benchmark index fell to a five-year low.
But Australia’s market was cushioned from Asia’s pain by gains in the financial, real estate and industrial sectors, and a 27 per cent jump in Uniti Group to $4.01 following a $3.1 billion takeover offer.
The benchmark S&P/ASX 200 lost most of Monday’s gains, dropping 0.7 per cent, or 52 points, to 7097 points.
It fared better than Hong Kong’s Hang Seng, which was down 4 per cent in late trade, and China’s mainland CSI300 index, which was down 2.4 per cent.
The markets have been closed in Changchen, a city of 9 million people. Credit:Chinatopix/AP
Oil prices softened with benchmark US crude falling below $US100 per barrel for the first time in ten sessions, sending Santos down 4.1 per cent and Woodside Petroleum down 2.9 per cent.
China’s new lockdown includes the manufacturing hub of Shenzhen, raising fears of declining demand for raw materials and supplies of finished goods.
Global logistics firm Container xChange said Russia’s conflict with Ukraine has so far had little impact on global supply chains, but this latest Chinese lockdown would push up shipping prices.
“Clearly, 2022 has not brought any cheer to the supply chain industry,” Container xChange chief executive Johannes Schlingmeier said.
“Lockdowns in China will further reduce capacity and cause a surge in already inflated shipping prices. The shockwaves will be felt across the US and America, and almost everywhere in the world,″ Dr Schlingmeier added.
Iron ore miners declined on the ASX with BHP down 4.2 per cent, Rio Tinto down 4 per cent, and Fortescue down 4.9 per cent. Lynas Rare Earths fell by 8.3 per cent, and lithium miners Pilbara Minerals, Allkem, and IGO all declined.
The US Federal Reserve meets this week and was widely expected to start lifting its official cash rate.
Biggest gains:
- Uniti 27.3%
- Clinuvel 6.8%
- Janus Henderson 4.6%
- AUB Group 3.3%
- Healius 3.2%
Biggest declines:
- Chalice Mining -10.3%
- Champion Iron -9.4%
- Zip Co -9.3%
- Lynas -8.3%
- Pilbara Minerals - 7.6%