Hong Kong (AFP) - Oil bounced back on Thursday after a day of losses over demand concerns linked to China’s Covid-19 lockdowns as markets in Hong Kong and Shanghai fell sharply.

Ongoing restrictions in the country, including in the economic hub of Shanghai, where millions remain confined to their homes, have hit transport networks.

But traders were balancing the demand shock alongside threats to supply caused by the war in Ukraine, with the European Union mulling bans on Russian crude.

The United States has said it will release a substantial portion of its reserves to cushion the shortfall.

“I continue to expect that Brent will remain in a choppy $100.00 to $120.00 range, with WTI in a $95.00 to $115.00 range,” said OANDA’s senior market analyst Jeffrey Halley.

“A potential European oil embargo on Russia next week after this weekend’s French elections could see a move towards the top of the range.”

Hong Kong’s Hang Seng Index continued its downward spiral and Shanghai closed more than two percent lower as news from China around Covid-19 restrictions, interest rate cuts and curbs on tech companies remained a cause of concern.

“China’s markets continue to underperform, weighed down by growth fears and the Covid-zero policy on the mainland, while US delisting fears on dual-listed equities continue to hamstring Hong Kong markets as well,” Halley said.

But elsewhere in Asia, markets were largely up, with Japan’s Nikkei 225 making the most significant gains and continuing a week of upward movement on optimism over a falling yen. But the Bank of Japan could face pressure over its loose policy.

Seoul, Jakarta, Mumbai and Sydney were all marginally higher.

Wall Street saw mixed results on the back of losses linked to dwindling subscriptions at streaming behemoth Netflix that have also weighed on tech stocks in Hong Kong.

Investors are also cautiously awaiting Federal Reserve Chair Jerome Powell’s remarks before the US central bank’s next meeting, with concerns high about rate hikes.

“Fed Chair Powell and ECB President (Christine) Lagarde speak at an IMF Panel, while BoE Governor (Andrew) Bailey speaks at a separate event later Thursday,” Stephen Innes of SPI Asset Management said.

“These central bankers, notably Powell, are unlikely to push back against market pricing, suggesting that the recent global bond market rally is a respite on the way to higher yields.”

European markets, which had pushed ahead on Wednesday aided by news of a February return to growth in eurozone industrial output, mostly started positively, with Paris and Frankfurt both up and London slightly lower.

- Key figures around 0815 GMT -

London - FTSE 100: DOWN 0.06 percent at 7,624.73

Paris - CAC 40: UP 1.45 percent at 6,721.04

Frankfurt - DAX: UP 0.99 percent at 14,504.50

Tokyo - Nikkei 225: UP 1.23 percent at 27,553.06 (close)

Hong Kong - Hang Seng Index: DOWN 1.25 percent at 20,682.22 (close)

Shanghai - Composite: DOWN 2.26 percent at 3,079.81 (close)

Euro/dollar: UP at $1.0918 from $1.0850

Dollar/yen: UP at 128.16 yen from 127.84 yen

Pound/dollar: FLAT at $1.3065 from $1.3065

Euro/pound: UP at 83.55 pence from 83.03 pence

West Texas Intermediate: UP 1.60 at $103.83 per barrel

Brent North Sea crude: UP 1.73 percent at $108.65 per barrel

New York - Dow: UP 0.7 percent at 35,160.79 (close)

burs-ssy/cwl