Asia-Pacific markets mixed with China’s Covid fears in focus as Beijing expands mass testing

SINGAPORE — Markets in Asia-Pacific traded mixed on Tuesday morning as investors are set to closely watch market reaction to Covid fears in China as Beijing expands mass testing.

Japan’s Nikkei 225 rose 0.17%, while the Topix was flat. South Korea’s Kospi rose 0.55%.

Australian stocks however fell as trading resumed from a holiday on Monday. The S&P/ASX 200 plummeted 2.34% in early trade.

Major miners slumped, as Rio Tinto fell more than 4%, Fortescue Metals dived 6.6% and BHP plummeted almost 6%.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.19%.

In earnings, HSBC is set to report its first-quarter results. Economic data for Tuesday will include South Korea’s gross domestic product for the first quarter.

Chinese markets in the day ahead will be top-of-mind for investors. Mainland and Hong Kong stocks plunged Monday as worries over a Covid surge and potential lockdowns in Beijing took hold.

Markets will be watching for reaction to Beijing announcing late Monday that mass testing will be expanded to another 10 districts and one economic development area, according to Reuters.

“Markets reacted negatively to news that COVID is spreading more rapidly in China, prompting fears of additional lockdowns and reduced output. This directly impacted Asian markets and also rippled through global financial markets,” ANZ Research analysts Brian Martin and Daniel Hynes wrote in a Tuesday note.

U.S. stocks were in negative territory earlier in the day, but recovered by the close. The Dow Jones Industrial Average cut a nearly 500-point intraday loss Monday, rising 238.06 points, or 0.7%, to 34,049.46. The S&P 500 ticked up 0.6% to 4,296.12. The tech-heavy Nasdaq Composite gained 1.3% at 13,004.85.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 101.670, extending its rise from levels just above 101.