November 22: Asian shares were on the defensive on Tuesday as a COVID-19 resurgence in China increased concerns that Beijing may reimpose strict pandemic curbs. According to Reuters, further restrictions could cause supply chain disruptions.

The dollar pulled back from strong overnight gains on Tuesday while oil took a pause from Monday's retreat, added the news agency.

“The broader Asia-Pacific index ex-Japan lost 0.25 percent in early trade, while China’s benchmark dipped 0.13 percent. Hong Kong's benchmark index fell 1.31 percent. Japan's benchmark Nikkei average opened up 0.78 percent, while Australian shares rose 0.55 percent,” Reuters reported.

According to the news agency, Beijing warned on Monday that it was facing its most severe test of the pandemic, fuelling investor concerns that China may be forced to resume strict mobility curbs and give stay and home orders across cities.

The controversial strategy - which aims to eradicate outbreaks - has seen millions locked down and citizens who have tested positive for the virus forcibly quarantined, BBC reported, adding, “Three deaths have been reported in the Chinese capital since Saturday, bringing the country's official death toll to 5,229. The latest fatalities have plunged parts of the city home to more than 21 million back into lockdown.”

Meanwhile, Reuters reported that the US dollar pared some of its strong overnight gains on Tuesday after investors flocked to the safe-haven currency on nerves over China's COVID flare ups.

“Oil prices rose slightly in early Asian trade, a day after Saudi Arabia denied a media report that it was discussing an increase in oil supply with OPEC and its allies. US crude rose 0.27 percent to $80.26 per barrel on Tuesday and Brent was at $87.79, up 0.19 percent. Spot gold traded at $1,738.39 an ounce,” Reuters added.