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Stock slide amid China unrest

Started by PocketOption, Nov 29, 2022, 06:16 am

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PocketOption

Stock slide amid China unrest

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It’s been a pretty quiet start to the trading week, with the negative session in Asia continuing into Europe and the US ahead of the open on Wall Street.


Chinese stocks have been hit particularly hard amid unrest over Covid restrictions. The protests really do highlight how increasingly frustrated the public is becoming with the leadership’s zero-Covid policy, even if it has been modestly relaxed recently.


Record cases across multiple cities are putting the policy to the test and the unrest highlights the enormity of the challenge facing President Xi Jinping and his commitment to zero-Covid. The combination of these creates huge uncertainty, both in terms of how the protests are handled and what the whole experience means for the future of the policy and the economy.


It comes at a time when Chinese stocks had been boosted by the prospect of the policy being relaxed, with more easing expected in the spring. So much now is uncertain which may continue to weigh on sentiment until we get a better idea of the direction of travel. Despite how much time has passed and what other countries have achieved, it would appear China is not prepared for a significant loosening of restrictions which could mean that frustration we’re seeing continues to bubble over.


The rest of the week promises to be extremely lively with the US returning from the Thanksgiving holiday and the calendar packed with big-hitting economic data from around the globe. That includes what is normally considered the biggest of the lot – maybe now second behind inflation – the US jobs report to wrap up the week.


Buckle up, it could be a bumpy ride.


Cryptos on the ropes


Bitcoin remains under pressure despite recovering slightly last week. Cryptos are still suffering the fallout from the FTX collapse and the still unknown full extent of the contagion. Not to mention the fact that traders will now be hyper-alert to similar vulnerabilities elsewhere in the crypto world. The fact that risk appetite is weak today also won’t be helping and bitcoin is off around 2% as a result and not far from $16,000. While it’s seemingly trying to form a base around $15,500-17,000, it may be easier said than done in this environment.


For a look at all of today's economic events, check out our economic calendar: www.marketpulse.com/economic-events/


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