Asian markets, crude drop on China Covid unrest

Stocks and oil prices sank Monday on concerns about protests across China at the government's hardline zero-Covid policy, fuelling uncertainty in the world's number two economy.

Hundreds of people took to the streets at the weekend after a deadly fire in the Xinjiang region on Thursday served as a catalyst for public anger, with many blaming virus lockdowns for hampering the rescue effort.

People have taken to the streets in Beijing, Shanghai, Guangzhou and Chengdu calling for an end to lockdowns as well as greater political freedoms in the highest-profile protests in China in years. The demonstrations come after an easing of some measures had fuelled hopes of a lighter pandemic approach.

China-linked stocks took the brunt of selling, with Hong Kong's Hang Seng Index down more than three percent and Shanghai off more than one percent. The yuan was off more than one percent.

There were also losses in Tokyo, Sydney, Seoul, Singapore, Taipei and Wellington.

"Sentiment has turned sour as unrest across China grows," said SPI Asset Management's Stephen Inne. "Protest of this extent is rare in the country and raises many uncertainties.

"The best scenario is further easing and reopening, but the speed at how things deteriorated over the weekend suggests the government needs to act fast. The risk of the situation escalating from here and short-term volatility remains high."

And Ken Cheung, of Mizuho Bank, added: "It appears that the zeroCovid policy is reaching its tipping point. More easing or refinement on the Covid measures will be needed to curb discontent."

The prospect of a hit to demand in the world's biggest crude importer hammered oil prices, with both main contracts down more than two percent.

The selling has taken a bit out of recent gains across markets in recent weeks sparked by hopes of a slowdown in the Federal Reserve's interest rate hikes as inflation finally shows signs of softening.

However, some observers said the protests could provide long-term benefits as they could force President Xi Jinping to shift away from his strict, economically damaging measures sooner.

Teneo Holdings' Gabriel Wildau said: "I don't expect Xi to publicly admit error or show weakness, but this wave of protests could cause the leadership to decide privately that the exit needs to proceed more quickly than previously planned."

Investors are now looking ahead to the release of US jobs data at the end of the week, which could provide clues about the Fed's next moves, while speeches by central bank boss Jerome Powell and other key policymakers will also be pored over.

Delegates at a global summit on trade in endangered species have postponed a vote on whether to approve a proposal to protect sharks, a move that could drastically reduce the lucrative and often cruel shark fin trade.

The proposal would place dozens of species of the requiem shark and the hammerhead shark families on Appendix II of the Convention on International Trade in Endangered Species (CITES).

The appendix lists species that may not yet be threatened with extinction but may become so unless trade in them is closely controlled.

If the plenary meeting gives the green light, "it would be a historic decision," Panamanian delegate Shirley Binder, who presided over the meeting, told AFP.

"For the first time CITES would be handling a very large number of shark species, which would be approximately 90 percent of the market," she said.

Although a vote had been expected, Binder suspended the session late in the afternoon and pushed it to Friday, as debate over the hippo trade between the European Union and African countries dragged on.

Insatiable appetite in Asia for shark fins, which make their way onto dinner tables in Hong Kong, Taiwan and Japan, has spurred their trade.

Despite being described as almost tasteless and gelatinous, shark fin soup is viewed as a delicacy and is enjoyed by the very wealthy, often at weddings and expensive banquets.