Hong Kong – Asian markets were marginally higher on Wednesday while oil began recovering after a downgraded IMF global growth forecast for 2022 had sent crude prices plunging.

The International Monetary Fund slashed its outlook by 0.8 percentage points, largely over inflationary crises linked to the Ukraine war and the coronavirus pandemic — prompting a five percent dive in oil prices on Tuesday.

“The economic effects of the war are spreading far and wide – like seismic waves that emanate from the epicenter of an earthquake,” IMF chief economist Pierre-Olivier Gourinchas said in a report.

Oil prices began to recover Wednesday, however, and Asian stocks also mostly rose following a positive lead from Wall Street, where US stocks rallied on the back of promising housing-starts data and solid corporate earnings.

Both main contracts climbed but crude has suffered major shocks this year, from the war in Ukraine to the raging coronavirus outbreak in China where the economy has been battered by anti-Covid restrictions.

Tens of millions are still barred from leaving home in economic center Shanghai and tech hub Shenzhen, where a Covid-19 outbreak has broken down supply lines and shuttered businesses.

“China continues to stay wedded to deleveraging parts of the economy while attempting to add stimulus in a targeted sector manner,” said Jeffrey Haley, senior market analyst at Oanda.

“However, the Shanghai lockdown and fears its Covid-zero policy will crimp growth this year continue to weigh on markets that clearly want more of the usual cast-of-thousands stimulus measures from years past.”