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The health situation in China slows down the markets



(Paris) Stock markets are worried Thursday about the economic consequences of the end of China’s “zero COVID-19” policy and the risk of the appearance of a new variant or new inflationary pressures.

European stock markets opened in decline: around 3:15 a.m. (Eastern time), Paris fell by 0.53%, London by 0.67%, Frankfurt by 0.33% and Milan by 0.51%.

In China, Hong Kong lost 0.92% and Shanghai 0.44%.

The Tokyo market lost 0.94%, following the Wall Street trend of the day before where the three main indices all dropped more than 1% on Wednesday after a hesitant session marked by the rise in bond rates. .

If the announcement by China earlier this week of the end of mandatory quarantines from January 8 was initially welcomed by the financial markets, the risk of negative consequences is starting to weigh more and more heavily.

This paradigm shift after two years of zero-COVID-19 policy “was meant to be a boon for the global economy, help to avoid a deep recession and save investors’ risk appetite after a cruel year for a whole series of financial assets,” comments Stephen Innes, analyst at SPI Asset management.

But in reality it “gives markets an inflationary headache and a sense of deja vu, which hits weary investors hard,” he said.

The United States will require a negative COVID-19 test for all travelers from China due to the explosion in the number of cases there and the “lack” of information provided by Beijing, authorities announced on Wednesday. American sanitary measures, thus mimicking measures already taken by other countries such as Japan and Italy.

In addition, several health experts warn that the explosion of cases combined with the lifting of health measures in China constitute a potential breeding ground for the emergence of new variants.

Which could “in turn, bring restrictive anti-COVID-19 measures back on the table and affect growth,” warns Ipek Ozkardeskaya, analyst at Swiquote Bank.

Oil prices, very sensitive to economic prospects, were thus down around 3:15 a.m. (Eastern time).

The barrel of Brent from the North Sea for delivery in February lost 1.42%, to 82.08 dollars. Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery the same month, dropped 1.44% to 77.82 dollars.

On the bond market, European sovereign debt interest rates are stabilizing after hitting their highest for more than ten years at the start of the week. The rate on the German government bond was worth 2.48% around 3:15 a.m. EST.

Trading volumes are reduced amid the confectioners’ truce and the weekend agenda is almost empty, with only the weekly number of registered unemployed in the United States on Thursday and an activity index from the Chicago area expected Friday.

Chinese tech suffers

Hong Kong-based technology stocks fell on Thursday. Alibaba lost 2.68%, 5.38%, Baidu 3.36% and Xiaomi 3.21%.

New production at TSMC

Taiwanese tech giant TSMC said on Thursday it had started mass production of 3-nanometer microchips, some of the most advanced semiconductors on the market. On the Taiwan Stock Exchange, its stock lost 1.11%.

On the side of currencies and bitcoin

The yen appreciated around 3:10 a.m. (Eastern time) against most other currencies after the announcement of bond purchases by the Bank of Japan, according to the Bloomberg agency. The Japanese currency rose 0.58% to 133.69 yen per dollar.

The euro meanwhile gleaned 0.18% against the greenback at 1.0631 dollars for one euro.

Bitcoin was flat (+0.19%) at $16,550.

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