China COVID lockdowns shock markets
- Brent Crude Oil dipped below US$100/barrel amid fears that China’s lockdown will decrease demand.
- Apple shares tumbled after one of the company’s biggest suppliers’, Foxconn, halted operations in Shenzhen.
- Toyota’s joint-venture factory that produces the Rav4 utility vehicle in Changchun, China is temporarily closed.
Financial markets have been dealt a one-two punch, with the escalating war in Ukraine followed closely by lockdowns in China.
Investors are naturally on edge, and news of fresh lockdowns hit production forecasts of multinationals that rely on manufacturing in China.
Apple (NASDAQ: AAPL) shares slumped on Tuesday after its supplier Foxconn temporarily halted operations in Shenzhen.
Toyota (TYO: 7203) suspended its operations at a joint venture plant in Changchun where the company’s Rav4 vehicle is made.
The price of oil was also dented by China’s lockdown as the price of Brent Crude oil, the global benchmark for crude oil, fell below US$100 a barrel on Tuesday.
As the world’s largest importer of oil, China’s lockdown threatens to decrease demand for the commodity.
This week saw investors weighing up mixed messages – the war between Russia and Ukraine that threatens to decrease the global supply of oil, while China’s lockdowns may shrink demand from the world’s largest oil importer.
With more than 17 million residents under strict lockdown in China, it is expected that more companies relying on suppliers in the region will have to reforecast production output for the foreseeable future.
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