NO STOCK SHOCK A woman wearing a face mask stands across an electronic stock board showing Japan’s Nikkei 225 index in Tokyo on Monday, May 9, 2022. AP PHOTO
NO STOCK SHOCK A woman wearing a face mask stands across an electronic stock board showing Japan’s Nikkei 225 index in Tokyo on Monday, May 9, 2022. AP PHOTO

HONG KONG: Asian stocks fell on Monday as investors remained anxious over inflation and the ongoing impact of China's Covid-19 lockdown policies, despite an initial Wall Street bounce, thanks to a solid United States jobs report.

Global markets have taken a beating over a series of crises, including surging inflation, rising interest rates, China's economic slowdown and the war in Ukraine.

Investors were given more bad news on Monday as China's April exports slumped to their lowest level in almost two years due to Beijing's strict zero-Covid policy that has pushed millions to go under lockdown and halted manufacturing hubs.

Exports plunged to 3.9 percent year on year, while imports were stagnant for April.

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Chinese customs spokesman Li Kuiwen tried to strike an upbeat note by saying the economy still had room to make a turnaround, but experts were less optimistic.

"Asian equities are down heavily in the red today as regional markets react to tightening Covid-19 restrictions in China and fears of a prolonged slowdown in the world's second-largest economy," said Jeffrey Halley, a senior market analyst at Oanda Asia Pacific.

Lockdowns across dozens of Chinese cities — from the manufacturing hubs of Shenzhen and Shanghai to the breadbasket of Jilin — have wreaked havoc on supply chains in recent months, crushing small businesses and trapping consumers at home.

The jitters reverberated across Asian equities, tanking in Australia, Singapore and Seoul. Tokyo's Nikkei index closed down more than 2.5 percent, while China's two mainland indices — Shanghai and Shenzen — saw a slight bump throughout the day.

Hong Kong's stock exchange was closed for a public holiday.

Markets were briefly lifted by an encouraging US employment report released last Friday, in which the US Labor Department announced that the world's largest economy added a better-than-expected 428,000 jobs last month, with the unemployment rate remaining at a low 3.6 percent.

But any uptick was short-lived, as the US' fierce monetary tightening has continued to send traders running for the hills.

The Federal Reserve hiked borrowing costs by half a percentage point last week, the most since 2000.

Wall Street's S&P 500 dropped 0.6 percent, while the other two US indices also dipped by last Friday's close. Nasdaq suffered the most at 1.5 percent.

The losses globally capped a volatile week, and markets are bound to remain "messy," said Diana Mousina, a senior economist at AMP Investments.

"There may be more downside as markets worry about a significant economic slowdown or 'hard landing' and aggressive interest-rate hikes," she wrote in a note, according to Bloomberg.

Oil is also fluctuating, with crude rebounding last Friday after key producers, led by Saudi Arabia and Russia, refused to lift output more than their planned marginal increase as they weighed tight supply concerns caused by Moscow's invasion of Ukraine.

But Sunday saw a meeting of the Group of Seven leaders, who pledged to phase out or ban the import of Russian oil to put pressure on Moscow. But this group of wealthy nations — the United States, France, Canada, Germany, Italy, Japan and United Kingdom — did not announce any specific commitment.

But the administration of US President Joe Biden said it would phase out their dependency on Russian energy in a "timely and orderly fashion" in order to "hit hard at the main artery of Putin's economy."

By Monday, crude had dipped slightly.

"Expect some pullback in prices as the EU (European Union) struggles to get unanimity on a Russian oil ban," Vandana Hari, founder of oil analysis firm Vanda Insights, told Bloomberg.