Early Morning Call: Hang Seng jumps as Chinese cities ease Covid restrictions
The Hang Seng is the best performer as China is said to be relaxing its strict Covid rules in some areas. Europe is meanwhile set to open mixed to higher.
Equity market overview
Equity markets mostly rose overnight in the Asia-Pacific region, with the Hang Seng showing strong gains as some Chinese cities announced the easing of Covid restrictions over the weekend.
Also in China, services activity shrank to six-month lows. The Caixin/S&P Global services purchasing managers' index (PMI) fell to 46.7 from 48.4, marking the third monthly contraction in a row. Caixin/S&P's composite PMI, which includes both manufacturing and services activity, fell to 47.0 in November from 48.3 the previous month, driven by falls in both manufacturing and service sector production.
Later this afternoon at 3pm, ISM non-manufacturing PMI is also expected to fall but will remain in expansion territory. Economists forecast the index to drop to 53.1 in November, from 54.4 the previous month.
After recording its worst month (November) since September 2010, the US dollar remains on the back foot this morning as better-than-expected non-farm payrolls (NFPs) data and most recent China Covid news entice investors to look at risk-on assets. Gold and other precious metals benefit from dollar weakness. Gold is trading above $1,800.
Elsewhere on the equity markets, Foxconn should resume production in late December to early January at its Zhengzhou plant, the world's biggest iPhone factory.
According to a Reuters report last month, protests against strict Covid restrictions may have affected more than 30% of the site's November production.
Commodities
Over the weekend OPEC+ agreed to stick to its oil output targets as the oil markets struggle to assess the impact of a slowing Chinese economy on demand and a G7 price cap on Russian oil supply.
OPEC+, which comprises the OPEC nations and its allies including Russia, angered the United States and other Western nations in October when it agreed to cut output by two million barrels per day, about 2% of world demand, from November until the end of 2023.
This decision from OPEC+ came two days after the G7 agreed a price cap on Russian oil.
Meanwhile the Baker Hughes rig count in the US remained unchanged at 784, on Friday, 38% above levels a year ago at this time. Drilling rigs targeting crude oil and natural gas both stayed flat for the week, at 627 and 155 respectively, while two rigs remained classified as miscellaneous.
LB is meanwhile well on track to be the worst performing commodity in 2022. It fell below $400 per 1000 board feet for the first time since June 2020.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize your opportunity
Deal on the world’s stock indices today.
- Trade on rising or falling markets
- Get one-point spreads on the FTSE 100
- Unrivalled 24-hour pricing
See opportunity on an index?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on an index?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from one point on the FTSE 100
- Trade more 24-hour indices than any other provider
- Analyse and deal seamlessly on smart, fast charts
See opportunity on an index?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
