Mixed As China Ramps Up COVID Fight

Asia-Pac equity indices are mixed, mirroring Wall St.’s performance on Friday.

• The Hang Seng outperformed, reversing earlier losses to sit 1.1% higher at typing. Losses observed in the utilities and real estate developer sub-indices were countered by gains in China-based technology large-caps, with the Hang Seng Technology Index sitting 3.0% better off at typing. To elaborate, sentiment in Chinese technology giants received a lift from Meituan’s Q4 earnings delivered last Friday, with the latter rallying 14.4% come the lunch bell.
• The CSI300 is 0.8% worse off at typing, underperforming major regional equity index peers despite recovering from declines of up to ~2% earlier in the session. The benchmark has come under pressure as authorities in the Chinese city of Shanghai announced a two-phase lockdown despite earlier assurances to the contrary, raising worry re: slower economic growth for ’22, with downside economic risks set to grow if more Chinese cities adopt similar measures to contain the spread of COVID-19. Steep losses were observed in the consumer staples sub-index, while energy and utilities outperformed.
• The Nikkei sits 0.5% lower at typing after opening lower, on track to end a nine-session streak of gains. The move lower comes despite a weakening in the JPY, with the impulse from a weaker currency failing to counter heavy losses observed in materials and industrial names.
• U.S. e-mini equity index futures sit 0.3% weaker across the board at typing.