Good morning. Chinese stocks have dropped sharply overnight after Beijing placed the 17.5m residents of tech hub Shenzhen into a lockdown.
The Hang Seng Tech Index, in Hong Kong, fell more than 9pc, while the city’s broader gauge fell 4.7pc.
The lockdown comes after virus cases in China doubled to 3,400, and shows the long tail of the country’s strict zero-Covid policy.
Elsewhere, the German subsidiary of the Russian energy company Rosneft has reported a hacker attack, according to Die Welt newspaper, which said there has not been any impact on Rosneft’s business. Businesses around the world have been on high alert for cyber assaults ever since Russia invaded Ukraine.
5 things to start your day
1) More guided munitions and fighter jets: what higher spending will mean for Britain’s armed forces: Expanding armoured cavalry and artillery will need to be matched with logistical support in the form of supplies, ammunition and engineers
2) Grant Shapps takes aim at Russian aviation and shipping: Vladimir Putin’s decision to shut out foreign airlines costs Kremlin billions in lost fees
3) End of Russian wood pellets mean soaring bills for biomass boiler owners: Suppliers are scrambling to find alternative supplies for homes and businesses that depend on the fuel for heating
4) Don’t blame every Russian for Putin’s barbaric invasion: Companies are right to boycott Russia – now they must ensure their penalties don’t validate anger at a nation.
5) Ofgem urged to prepare for Gazprom sanctions: Existing regulations do not allow for measures against licenced operators, energy regulator is warned
What happened overnight
Asian stocks fell Monday on a rout in Chinese technology shares, while Treasuries slid as elevated commodity prices stoke concerns that the U.S. may need aggressive monetary-policy tightening to tame inflation.
The 8pc plunge in a gauge of Chinese tech firms reverberated around the region, leaving an Asia-Pacific equity index in the red for a second session. A Covid lockdown in Shenzhen, a tech hub, added to the geopolitical and regulatory risks facing the sector in part from strained ties between the US and China.
A climb in Japanese shares amid a weaker yen and gains for S&P 500, Nasdaq 100 and European futures eased some of the gloom. Investors were parsing efforts at diplomacy as Russia continues its war in Ukraine, as well as comments from a U.S. official that Moscow asked China for military assistance.
Coming up today
- Corporate: Bodycote, Phoenix Group (full year results)
- Economics: Foreign direct investment (China)