Asian shares fall as China protests, lockdowns cloud outlook

BANGKOK (AP) — Shares skidded in Asia on Monday, with Hong Kong briefly dipping more than 4% following weekend protests in various cities over China’s strict zero-COVID lockdowns.

U.S. futures were lower after a mixed, shortened session Friday on Wall Street. Oil prices fell more than $2 a barrel.

The unrest in China is the boldest show of public dissent against the ruling Communist Party in years. It followed complaints that policies aimed at eradicating the coronavirus by isolating every case might have worsened the death toll in an apartment fire in Urumqi in the northwestern Xinjiang region.

China’s infection rate has been lower than in the United States and other countries, but the authorities are facing rising resentment over the economic and human costs of the approach known as “zero-COVID" as businesses close and families are isolated for weeks with limited access to food and medicine.

“For investors, when it comes to China, trying to predict with any degree the reopening certainty that has no certainty, basis, or track record to go by is looking like a dangerous game in the context of the disquietening protests and the colossal challenge China’s leaders now have on their hands," Stephen Innes of SPI Asset Management said in a commentary.

By midday Monday, Hong Kong's Hang Seng was 2% lower at 17,225.41 and the Shanghai Composite index had declined 1% to 3,069.66.

On Friday, China's central bank sought to boost the economy by easing its reserve requirement ratio, the proportion of assets banks must hold in reserve, by a quarter percentage point to 7.8%.

“The cuts are a bid to support weakening economic growth dragged down not only by COVID restrictions but also a deeper property market rout," Mizuho Bank noted in a report. However, it said, that news was...