European markets are watching changes in China’s Covid policy

Chinese health authorities said officials were “closely watching” Covid developments when asked if the protests in the region would lead to shifts in the zero Covid policy. CNBC’s Karen Tso and Jeff Cutmore discuss the market’s reaction to the press conference.

ASM International Shares rose 6.5% in early trade to lead the Stoxx 600 after the Dutch semiconductor raised its guidance in the fourth quarter.

At the bottom of the index is the British private equity firm Bridgepoint Group It fell 4.7% after media reports indicated that the company is considering buying $1 billion from Energy Capital Partners, which is investing in energy transformation.

National University of Singapore Professor Wang Junguo said on CNBC that the Chinese government is unlikely to make sudden changes to its policy on the non-spread of the coronavirus, because that would create chaos. “Squawk Box Asia”.

“If you suddenly change the policy, I think the damage and consequences will be worse – it will be really messy because I think the spread of Covid will be absolutely unprecedented,” Wang said.

He added that he expected Chinese leader Xi Jinping to make adjustments at more domestic levels to mitigate public opposition.

Wang said Xi does not want to formally admit that “the policy has been wrong for a long time,” but he cannot change it immediately.

– Jihe Lee

Oil prices rose ahead of China’s State Council press conference, as investors continue to monitor developments – paring back some of the losses they saw on Monday, when they hit their lowest levels in nearly a year.

The West Texas Intermediate futures It increased by 1.76%, to stand at $78.59 a barrel, while it rose Brent Crude Futures It rose 2.28%, to stand at $85.00 a barrel.

However, oil markets may be “miscalculating news of China’s shutdown,” Rystad Energy wrote in a note.

“[The latest lockdowns’] The potential impact on short-term Chinese oil demand, particularly in transportation, is likely to be minor,” the note states, citing the company’s research on real traffic activities in China.

Even as daily Covid cases continue to rise, cities like Shanghai have not shown a slowdown in road traffic activity, according to Rystad Energy’s own research.

– Lee Ying Chan

Stephen Glass, managing director of Pella Funds Management, said it’s “important” for investors to look at valuations right now as a recession looms and inflation looks set to continue.

In this environment, Glass picked a list of nine stocks that he said “look especially cheap given the growth outlook.”

CNBC Pro subscribers can read more here.

– Wizen tan

European markets are heading into a mixed mood on Tuesday as investors keep a close eye on China amid speculation that the government may make changes to its strict anti-coronavirus policy.

Britain’s FTSE is expected to open 46 points higher at 7,494, Germany’s DAX is down 3 points at 14,401, France’s CAC is up 2 points at 6,675, and Italy’s FTSE MIB is up 27 points at 24,523, according to data from IG.

Earnings come from EasyJet and data releases include Eurozone Consumer Confidence and Business Climate data for November.

– Holly Ellytt