Lower In Asia On Recession Worry; COVID Worry Looms (Again) In China

Asia-Pac equity indices are mostly lower at typing, with a mixed lead from Wall St. providing little guidance. Recession worry was evident throughout the session, with several commodity benchmarks broadly extending Tuesday’s losses over fears of economic slowdowns crimping demand.

• The Hang Seng leads losses, sitting 1.4% worse off on losses in >80% of its constituents. Broader sentiment has suffered as Shanghai carries out mass testing in 12 of the city’s 16 districts, unwinding some optimism re: economic recovery, seeing the Hang Seng give up virtually all gains made over the past week.
• The Chinese CSI300 deals 1.3% weaker at typing, on track for its largest decline in a week on weakness in nine of ten sub-indices, with richly-valued consumer staples and healthcare stocks bearing the brunt of the selling over previously-flagged COVID fears. The materials (-2.4%)and energy (-4.8%) sub-indices were softer as well, reflecting declines in major commodity benchmarks.
• The Nikkei 225 trades 1.1% lower, with the broader TOPIX index sitting 1.4% worse off at typing. ~85% of the Nikkei’s constituents are in the red, with the latest bout of JPY strength catalysing weakness in major exporters and large-cap names.
• The ASX200 fell to a lesser extent than regional peers, dealing 0.4% weaker at writing. Outperformance in the tech sub-index (+3.0%) was countered by a sharp decline in the materials sub-gauge (-4.6%), with the likes of Rio Tinto Ltd (-6.4%) and Mineral Resources Ltd (-5.3%) leading the way lower.
• U.S. e-mini equity index futures sit on either side of neutral levels at typing, having whipped between gains and losses throughout Asia-Pac dealing.