China's Covid-19 constraints adversely affect stock futures post victorious Holiday Week

The stock markets performed pretty well during the holiday-shortened Thanksgiving week. But later, due to the stern covid-19 lock-down policy of China adversely impacted the stock futures, pushing the oil prices to a new low. The market opened lower, showing a descending trend, on Monday.

The double whammy situation continued in the market, as the investors witnessed a drop in the futures linked to the Dow Jones Industrial Average of 178 points or 0.58 percent. Hong Kong’s Hang Seng Index also plummeted by 4.2 percent during the early hours of trading.

The S&P futures also knocked down to as much as 0.67 percent along with Nasdaq 100 futures nosediving by 0.85 percent. The Hang Seng (HSI) China Enterprises Index also tumbled down by 1.7 percent at the time of market closing hours.


The Chinese currency collapsed as opposed to the US dollar, as the onshore yuan fell by 0.9 percent. And the offshore yuan was seen trading 0.3 percent lower.

Since the covid-19 cases in China started to escalate, the local government stiffened the control with regards to restrictions in the country. During the holiday week, people showed their wrath against the zero-covid policy set up by the Beijing government. The Asia trade took a hit spawned by these developments, leaving the oil futures hanging lower.



This move is taken to keep the economy's condition balanced that was debilitated by the coronavirus limitations. On the contrary, analysts feel that this measure taken by the government wouldn’t have any major impression on the economy.

As per the reports, analysts said, "Cutting the RRR now is just like pushing on a string, as we believe the real hurdle for the economy is the pandemic rather than insufficient loanable funds." They further added, "In our view, ending the pandemic [measures] as soon as possible is the key to the recovery in credit demand and economic growth."

FAQs:

1. What are stock futures?
   Stock futures are derivative contracts where a buyer and seller enters into an agreement to buy and sell the underlying asset on a futuristic date decided today. The stock future are traded to buy or sell on the futures exchanges
2. Which is better? Stocks or Stock Futures?
   Both stocks and futures have their ebbs and flows but there are myriad advantages if you go after the former than the latter. Investors get to trade in the market as long as the trade is in motion. Plus, the trading costs are lower, giving both the parties the leverage they need for the risk they take.