HONG KONG, May 16 — Asian equities retreated today following last week’s temporary rally on Wall Street due to fears of surging inflation and supply chain woes inflicted by Beijing’s punishing zero-Covid policy.
One of the main drivers of volatility is China’s continued lockdowns. Economic engine Shanghai in particular has been under strict virus restrictions since April, shuttering factories and pausing port activity. The urban unemployment rate also climbed to its highest level in more than two years — which Wei said will be of particular worry to China’s leadership.
“Indeed, this is the hallmark of a market filled with air pockets which have left more than a few investors licking their wounds.”Economist Clifford Bennett of ACY Securities said “there is a very real risk, even likelihood of a triple Northern Hemisphere recession across the US, Europe and China simultaneously and virtually immediately”.