Share prices fall on concerns over further China lockdowns
Shares in the US and Asia have fallen on fears about the impact of lockdowns in China on global economic growth.
On Tuesday, the technology-heavy Nasdaq Composite index closed at its lowest level since late 2020.
Tesla was a big faller, with more than $125bn (£99.3bn) wiped off its market value as boss Elon Musk moves ahead with his takeover of Twitter.
Concerns about earnings reports from some of the world’s biggest technology firms also weighed on markets.
At the same time, news that Russia will cut gas supplies to Poland and Bulgaria also added to the negative sentiment.
Investors were already worried about the prospects for aggressive interest rate hikes in the US and around the world to combat rising global inflation and the war in Ukraine.
Authorities in Beijing are trying to stamp out a Covid-19 outbreak and avoid a repeat of the city-wide restrictions that have kept Shanghai in lockdown for a month.
That has raised concerns about the prospects for growth in the world’s second largest economy and the potential knock-on effect globally.
Japan’s Nikkei 225 index closed 1.2% lower, while South Korea’s Kospi index fell by 1.1%.
That followed stock market falls in New York, with the Dow Jones Industrial Average closing 2.4% lower and the Nasdaq losing almost 4% on Tuesday.
Alvin Tan, head of Asia FX strategy at RBC Capital Markets, told the BBC that there were concerns over a possible lockdown of Beijing.
“The extended lockdown in Shanghai and other parts of the country has seriously damaged economic activity and consumer sentiment,” Mr Tan said.
“Beijing alone contributes about 3.5% of China’s GDP, while Shanghai contributes around 4%. So it would be a massive blow to the overall economy if these two cities were to be locked down at the same time,” he added.
However, shares in mainland China rose after losses earlier in the week. On Wednesday, the Shanghai Composite added 2.5% and the CSI 300 gained 2.9%.
Meanwhile, Tesla shares lost more than 12% as its chief executive moved ahead with his takeover of Twitter.
“The only thing we know for sure is that Musk considers himself a free speech absolutist, so that will be what the platform will primarily focus on from now,” said Dexter Thillien, lead analyst for technology and telecoms at Economist Intelligence Unit.
After US markets closed, Google’s parent company Alphabet said the war in Ukraine hurt YouTube advertising sales, which helped send its shares lower in after-hours trade. – bbc.com