Hong Kong (AFP) - Asian markets fell Tuesday, with Hong Kong tech firms leading another collapse in the city's Hang Seng Index following the Covid-19 shutdown of tech hub Shenzhen and worries over Russia's military outreach to China.
Concerns about China's economic outlook saw oil prices suffer fresh selling pressure, with WTI falling back below $100 a week after it hit a 14-year high on the back of Vladimir Putin's invasion of Ukraine.
Hopes for progress in talks to bring an end to the war in eastern Europe were also putting pressure on the black gold.
Global markets have been in a spiral since Russian troops marched into the neighbouring country, leading international powers to impose crippling sanctions on the country and numerous companies to pull out.
The measures have fanned concerns about the supply of commodities from the region, particularly oil, sending prices through the roof and ramping up fears that already high inflation would run out of control and shoot a hole through a fragile economic recovery.
Among the hardest-hit markets has been Hong Kong, which was already under pressure from China's regulatory crackdown on technology firms as part of the government's move to tighten its grip on the economy.
News that US authorities were also looking to crack the whip over Chinese firms listed in New York sparked a rout last week.And the selling continued Monday after news emerged of the Shenzhen lockdown.
The Hang Seng Index dived Monday as the Hang Seng Tech Index was pummelled 11 percent after China said it would lock down Shenzhen to contain a Covid-19 outbreak.
Another trouncing came later in the day in New York, exacerbated by news that Putin had asked China for military assistance in its battle in Ukraine.
Traders are fretting that Chinese companies could face sanctions or delisting if Beijing reacts positively to Russia's plea.
A "material rerating for China tech may need to see a shift in regulatory tone", Marvin Chen, a strategist at Bloomberg Intelligence, said, adding that interplay between Moscow and Beijing would be closely followed.
"Delisting fears and renewed Covid pressures delivered a double-whammy to the few bulls left.There's wholesale liquidation and even optimists think the space is just too hard right now."
And Sharif Farha, at Safehouse Capital, added: "The issue right now is the lack of a positive catalyst in China with regulatory noise continuing to create an overhang" on US-listed Chinese firms.
"In the short term we think overall Chinese equities will continue to face selling pressure.Longer term, the strong will survive and likely get stronger, bigger."
The Hang Seng Index dived more than six percent on Tuesday as afternoon selling wiped out a minor bounce from data out of China suggesting the economy started 2022 on a positive note.
Shanghai was also in trouble, losing five, while Sydney, Seoul, Mumbai, Taipei, Jakarta, Bangkok and Wellington were also well down, though Tokyo, Singapore and Manila rose.
While data out of China beat forecasts, unemployment jumped and the shutdown in Shenzhen along with a surge in Covid-19 cases across the country has ramped up concerns the giant economy will see another growth slowdown.
They could also lead to more supply chain snarls, which can add to inflation.
That, in turn, has seen traders cut their expectations for demand from the world's biggest oil importer, with WTI dropping to as low as $96.70, well down from the 14-year peak of $130.50 touched last Monday.
Brent was also sharply down at $100.05, from its peak last week of $139.13.
The selling on oil markets was compounded by indications that moves were progressing on bringing the Ukraine war to an end.
Moscow said it made headway Monday in peace talks ahead of the latest round of negotiations, while US-China talks were also said to be broadly positive.
"Whilst they're yet to produce any solid results, (Russia-Ukraine talks) are deemed as a step in the right direction and hope remains that a resolution can be found," said Matthew Simpson at StoneX Financial.
"And those hopes have removed a key pillar of support for commodity prices."
He added that talk last week of $200 a barrel and suggestions this week of $50 were both "far-fetched" but tipped crude to hover around $90-$110.
Meanwhile, traders are also anxiously awaiting the Federal Reserve's policy meeting with most tipping a quarter-point interest rate hike as officials try to rein in prices while also being mindful of the shaky economic recovery.
Key figures around 0710 GMT
Hong Kong - Hang Seng Index: DOWN 6.2 percent at 18,320.53
Tokyo - Nikkei 225: UP 0.2 percent at 25,346.48 (close)
Shanghai - Composite: DOWN 5.0 percent at 3,063.97 (close)
West Texas Intermediate: DOWN 5.5 percent at $97.32 per barrel
Brent North Sea crude: DOWN 5.7 percent at $100.84
Dollar/yen: UP at 118.36 yen from 118.19 yen on Monday
Euro/dollar: UP at $1.0971 from $1.0949
Pound/dollar: UP at $1.3029 from $1.3003
Euro/pound: UP at 84.21 pence from 84.18 pence
New York - Dow: FLAT at 32,945.24 (close)
London - FTSE 100: UP 0.6 percent at 7,196.25 (close)
