China Protests’ Impact on Hong Kong Markets
Significant losses were incurred by stock markets in Hong Kong primarily because of rising unrest in China which has turned into nationwide protests.
Chinese Government is not convinced that it needs to either thwart or reduce its strict Covid-19 restrictions. The entire country seems to be suffering from the decisions made by the Chinese government.
As a result thereof, oil futures in Hong Kong went year-to-date low as China’s demand for import crude oil declined.
At the end of the closing hours of trading, Hang Seng Index suffered a decline of 1.63%. Similarly, Hong Kong’s index of Hang Seng Tech too saw a 2.07% decline.
Global Trade Markets Witness Significant Price Reductions
On the other hand, Shanghai Composite and Shenzhen Component in China fell as low as 0.75% and 0.69% respectively.
Against the USD, the Yuan failed to make any gains and instead fell as low as 7.20 per dollar.
The benchmark for the US oil, namely West Texas Intermediate Futures, edged down at least 3%. The 3%decline is by far the lowest level the US oil had seen since December 2021.
Meanwhile, the central bank of China announced that there will be up 25 basis point decline in the financial institutions’ reserve requirement ratio.
The bank further suggested that about 500 billion yuan would be injected as liquidity on a long-term basis.
However, due to the rising number of Covid cases in China, a significant decline of 3% has been noted in China’s industrial profits. This fact was duly noted by the National Bureau of Statistics in its Jan to Oct report.
Global Benchmark Indexes
The Australian index of S&P/ASX 200 also suffered a fall of 0.42% because of a 0.2% decrease in retail sales from September to October.
In South Korea, the stocks pertaining to Kospi also declined by at least 1.21%.
Indian Stock Rise
However, there were significant gains in the stock prices in India.
India’s benchmark index which is known as Nifty 50 hit its all-time high i.e. 18,611.05 according to the National Stock Exchange of India.
Similarly, the Indian Sensex index too saw massive price gains when the index touched 62,690.39 which too was noted as the index’s best since 25th November.
India is currently among the fastest-growing and emerging economies in the Asian continent. While China is still facing the negative impact of the COVID-19 situation, India is making progress in almost every sector.
India was among the countries that were struck by COVID-19 in the worst possible manner. But the country has emerged and now, it is moving towards a great recovery and it is improving its economy.
Baltic and Poland Dissent
On the other hand, it is very unlikely that the capping of Russian oil prices will be reduced by any means. Even though the Baltic States as well as Poland have voted against the capping, their dissent will not like to make any difference.
Both countries have objected to the capping proposal on the pretext that the capping is modest instead of being harsh. They claimed that the capped price is more or less the same at which Russia sells its oil normally.
The capping will in any case come into force on 5th December 2022.
