Intensified COVDI-19 infections and China’s COVID Zero policy together adding more fears to the economic growth after news on the further lockdowns send stocks, commodities and the yuan to tumble.
The benchmark CSI 300 Index dropped as much as 2.19%- the biggest slide in two weeks. The Chinese yuan fell to its weakest in a year on conners about rising capital outflows.
Chinese authorities ordered mandatory tests in a district of Beijing and has put some areas of the capital under lockdown. The news echoed around the global markets tumbling stocks and equity futures.
“There are concerns about the Covid situation in Beijing evolving into what happened in Shanghai with some prolonged lockdowns that bites the economy,” said Kevin Li, portfolio manager at GF Asset Management (Hong Kong) Ltd. as reported by Bloomberg.
The renewed sell off comes as investors worry on lack of policy promises to shore up the economy effecting growth and stabilizing markets.
Markets have shrugged off Friday’s latest policy view from the People’s Bank of China to ensure stability.
“Overall, the selloff may have been further exacerbated by the dent in global risk sentiment, with the lack of positive catalyst for market participants to take on added risks for now,” said Jun Rong Yeap, a strategist at IG Asia Pte.