HONG KONG- Asian shares bounced up on Tuesday after a late revival on Wall Street, though global growth fears stoked by China’s strict COVID-19 curbs and an expected streak of aggressive Federal Reserve tightening sapped risk appetite.
MSCI’s broadest index of Asia-Pacific shares outside Japan ticked up 1.1 percent, helped by China’s blue chip index adding 1.4 percent, after its worst day in two years on Monday. Hong Kong’s benchmark Hang Seng Index bounced 1.9 percent.
The tech sector rallied 5.3 percent, boosted by mega firms such as Tencent Holdings and Alibaba Group. News that Elon Musk, the world’s richest man, had clinched a deal to buy Twitter for $44 billion cash also underpinned sentiment.
The nervousness about China’s economic slowdown, however, hit Australian shares, with the local benchmark down 2 percent by early afternoon, hurt particularly by declines in miners.
Japan’s Nikkei stock index pared earlier gains and was down 0.04 percent by early afternoon. US stock futures, were little changed in Asia trade.
The lockdown in Shanghai, and the spread of cases in other big cities like Beijing, is weighing on the growth outlook for the world’s No.2 economy and investment sentiment, said ManishiRaychaudhuri, Asia-Pacific equity strategist at BNP Paribas.
“If the lockdown situation persists for longer”, it will impact China’s economy significantly and “also have an impact on the supply chains across the world”, he said.
Markets have also been fretting that an aggressive pace of tightening by the US Fed could derail the global economy, which has only just started to recover from the pandemic.
The Fed is expected to raise rates by a half a percentage point at each of its next two meetings.
Lockdown in China’s financial hub has dragged into a fourth week, as authorities stick to their “dynamic zero-COVID” policy to combat the latest outbreak of Omicron cases.
