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China’s rare public rebellion against zero-COVID lockdowns sends markets crashing

US futures fell after a mixed and shortened session on Friday on Wall Street. Oil prices have fallen by more than $2 a barrel.

The unrest in China is the boldest display of public dissent against the ruling Communist Party in years. It followed complaints that policies aimed at eradicating the coronavirus by isolating each case could have made the situation worse death toll in an apartment fire in Urumqi in the northwestern region of Xinjiang.

China’s infection rate has been lower than those of the United States and other countries, but authorities are facing growing outrage over the economic and human costs of the approach known as “COVID-zero” as businesses close and businesses close. families are isolated for weeks with limited access to food and medicine.

“For investors, when it comes to China, trying to predict by any degree the certainty of reopening that has no certainty, basis or track record to go by seems a dangerous game in the context of the disturbing protests and colossal challenge from China’s leaders they now have it in their hands,” SPI Asset Management’s Stephen Innes said in a comment.

Hong Kong’s Hang Seng fell 2.1% to 17,211.76 and the Shanghai Composite Index lost 1.3% to 3,061.69.

On Friday, China’s central bank sought to boost the economy by reducing its reserve requirement ratio, the percentage of assets banks must hold in reserve, by a quarter of a percentage point to 7.8%.

“The cuts are an attempt to shore up weakening economic growth dragged down by not only COVID restrictions but also a deeper housing market rout,” Mizuho Bank noted in a report. However, she said, that news has been overshadowed by the rise in the number of virus cases and the protests.

Tokyo’s Nikkei 225 index lost 0.4% to 28,162.83 and Seoul’s Kospi lost 1.3% to 2,408.76. In Sydney, the S&P/ASX 200 fell 0.4% to 7229.10 after the release of weaker-than-expected retail sales data.

Bangkok’s SET fell 0.2%, while Mumbai’s Sensex gained 0.4%.

As markets closed at 1:00 PM Eastern on Friday following the Thanksgiving holiday Thursday, the S&P 500 fell less than 0.1% to close at 4,026.12.

Nearly 70% of stocks in the benchmark index gained ground, but the broader market was dragged down by technology companies, whose high valuations give them more weight in pushing the market up or down.

The Dow The Jones Industrial Average rose 0.5% to 34,347.03. The Nasdaq it fell 0.5% to 11,226.36.

Long-term bond yields were relatively stable, but still hovering around multi-decade highs. The yield on the 10-year Treasury, which influences mortgage rates, rose to 3.70% from last Wednesday’s 3.69%.

Investors remain concerned whether the Federal Reserve can tame the highest inflation in decades by raising interest rates without going too far and causing a recession.

The central bank’s key rate is currently in the range of 3.75% to 4%, up from zero in March. He warned that he may eventually have to hike rates to previously unforeseen levels to curb high prices on everything from food to clothing.

Wall Street receives several important economic updates this week. The Conference Board’s business group will release its November report on consumer confidence and the US government will release its closely monitored monthly jobs report.

In other trading on Monday, benchmark U.S. crude lost $2.23 to $74.05 a barrel in electronic trading on the New York Mercantile Exchange. It gave up $1.66 to $76.28 a barrel on Friday.

Brent crude, which is used to price oil for international trade, fell $2.40 a barrel to $81.31.

The dollar fell to 138.33 Japanese yen from 139.28 yen. The euro fell to $1.0360 from $1.0379.