(Bloomberg) China’s CSI 300 index fell more than 0.6% on Monday to its lowest in two weeks as authorities closed down the city of Shanghai in response to rising Covid-19 cases.
The fall in stocks happens amid worry that the lockdowns would crowd Chinese stocks due to expectations of disruptions in business operations and impacts on the economic growth.
The zero-tolerance approach to the coronavirus in China has put pressure on the country’s growth, despite the authorities promising more support to the local markets recently.
The share prices are also dampened by the already existing concerns of delisting of major firms from the US exchanges and the impacts of the Ukrainian war.
The Monday decline of CSI 300 adds pressure to the stock index which has fallen by 16% this year, making it the worst national gauge performer in the region.
Tech giants still traded higher on Monday due to robust earnings reports, with the Hang Seng Index rising 1.3%.
Castor Pang, head of research at Core Pacific-Yamaichi Intl HK, says that the Covid outbreak and partial lockdown in Shanghai could spread into other regions. Pang says the impacts could make it difficult for China to attain the 5.5% growth target this year.
Goldman Sachs is still optimistic about Chinese stocks and forecasts up to a 22% upside in the next 12 months for the country’s MSCI China Index.
Hang Seng Index is up +1.31%, CSI 300 is down -0.63%.
