China's blue chips weighed by surging COVID cases, Shanghai lockdown

SHANGHAI - China's blue-chips closed lower on Monday as a spike in COVID-19 cases and a lockdown in Shanghai raised fears of a slowdown in economic activity.

The blue-chip CSI300 index fell 0.6% to 4,148.47, while the Shanghai Composite Index gained 0.1% at 3,214.50 points

China's financial hub of Shanghai launched a planned two-stage lockdown of the city of 26 million people on Monday. A record 3,450 asymptomatic COVID cases were reported in Shanghai on Sunday, accounting for nearly 70% of the nationwide total, along with 50 symptomatic cases.

"Due to the high transmissibility of Omicron and a strengthened ZCS (zero-COVID strategy), markets need to especially be concerned about a slide in growth in Q2," said Nomura analysts in a note.

Profit growth at China's industrial firms accelerated in January-February in line with other signs of momentum in the economy. Goldman Sachs analysts said policies to further ease monetary and fiscal measures can be expected given the coronavirus flare-ups.

China will soon roll out measures to make it easier for private companies to issue bonds, China's securities regulator said late on Sunday, as a resurgence in coronavirus infections threatens an already slowing domestic economy.

Consumer staples lost 1.7%, with liquor makers down 3.4%.

New energy, semiconductor and non-ferrous metal stocks fell between 1% and 1.6%.

In a bright spot, real estate developers rose 1.9% and energy shares jumped 3.4%.