Equities and Oil Prices Dip as Investors Fret Over China Reopening
- Global equities edged lower on Wednesday, Dec. 28, while oil prices tumbled as investors weighed their enthusiasm about the potential economic boost from China lifting COVID restrictions with concerns about rising infections there.
- China's government announced on Monday, Dec 26, 2022, that it would stop requiring inbound travellers to go into quarantine starting from Jan. 8. While China's health system has come under heavy stress from the lifting of restrictions so far, strategists at JP Morgan forecast a "likely infection peak" during the Lunar New Year holiday next month, followed by a "cyclical upturn after nearly three years of on and off restrictions."
- MSCI's broadest index of global stocks was flat as investors stayed on the sidelines close to the end of a brutal year for equities. The global index is on course to end 2022 down about 20%, in its biggest percentage decline since 2008, during the financial crisis.
- Oil prices dipped as traders weighed concerns over the surge in COVID cases in China against the easing of restrictions in the world's top oil importer, which had fuelled some hopes for a demand boost. U.S. crude fell 2.34% to $77.67 per barrel and Brent was at $82.29, down 2.42% on the day.