Asia-Pacific Shares Mixed; Jump in Oil Prices Drive Energy Shares Higher in Japan

The major Asia-Pacific stock markets traded mixed on Monday as investors reacted to an escalation in the European energy crisis, a jump in crude oil prices and a sharply higher U.S. Dollar. The best performing indexes were China’s Shanghai Index and Australia’s S&P/ASX 200 Index. Hong Kong’s Hang Seng Index is down over 1%.

China Shares Pressured by COVID Curbs, Yuan Weakness

China’s blue-chip stocks dropped on Monday, led by consumer staples amidtightening COVID-19 restrictions in some big cities, while foreign investors liquidated shares as the Yuan plummeted to a more than two-year low.

At 07:29 GMT, the benchmark Shanghai Index is at 3199.91, up 13.43 or +0.42%.

China’s southern tech hub of Shenzhen said it will adopt tiered anti-virus restriction measures starting on Monday, while the southwestern metropolis of Chengdu announced an extension of lockdown curbs.

China’s Yuan touched a new more than two-year low against the U.S. Dollar, pressured by broad greenback strength in the global market and the newly implemented COVID curbs. This move prompted foreign investors to sell more than 6.5 billion Yuan ($940 million) of Chinese shares so far through the stock connect scheme.

In economic news, a strong rebound in China’s services sector eased slightly in August amid fresh COVID-19 flare-ups but business confidence rose to a nine-month high, a private survey showed.

In sector related news, consumer staples lost 2.1%, but the energy crisis in Europe lifted Chinese energy shares 4.7%, with coal miners surging 5%.

Technology stocks listed in Hong Kong were weaker, led by Meituan, Tencent and Alibaba down between 2% and 3.1%.

Japanese Stocks Dragged Down by Wall Street Weakness

Japan’s Nikkei share average fell for a fourth straight session on Monday, tracking Wall Street’s weak performance last week, amid the absence of market-moving cues due to a U.S. banking holiday.

Japan’s Nikkei 225 Index settled at 27619.61, down 31.23 or -0.11%. The volume of shares traded on the Tokyo Stock Exchange’s main board was 0.85 billion, compared to the average of 1.13 billion in the past 30 days.

Energy shares rose, with refiners and explorers gaining 1.06% and 0.83%, respectively after oil prices surged over $2.00 per barrel.

Higher Commodity Prices Boost Australian Shares as Investors Awaited the Next RBA Rate Hike

Australian shares closed higher on Monday as the resource-heavy bourse was buoyed by stronger oil and metal prices, while investors also awaited the central bank’s rate decision amid growing inflationary pressures.

The S&P/ASX 200 Index closed at 6852.20, up 23.50 or +0.34%.

In sector and stock-related news, miners jumped 2.1% and were the top gainers on the domestic bourse after iron ore futures rebounded. Heavyweights BHP Group and Rio Tinto gained 3.2% and 1.8%, respectively.