According to the Wall Street Journal, Chinese stocks fell sharply after Beijing reported a surge in COVID cases on Monday. Investors fear that China’s strict “Zero-Covid” policies could hit China’s economic growth and companies’ incomes.
The Shanghai Composite Index fell 5.1%, and CSI 300 index closed down 4.9% at a two-year low.
Global stock markets dropped on Monday over investor worries that the latest COVID outbreak in Beijing could lead to more lockdowns in China as in Shanghai, which could hurt the world economy.
Hong Kong’s Hang Seng Index lost 3.7%. The Chinese currency, the renminbi, also dropped 1% against the U.S. dollar.
In Europe, the Stoxx Europe 600 was down 1.3%, and on Wall Street, the S&P 500 decreased about 1%.
As reported by the New York Times, commodities such as oil also decreased because strict lockdowns could hurt the growth and exports of the world’s second-largest economy.
Oil prices fell over 5%, with Brent crude oil traded at about 100 dollars a barrel after reaching nearly 115 dollars a barrel one week ago.
Economists also have adjusted their forecast for China’s GDP growth.
Last week, the International Monetary Fund cut China’s growth forecast to 4.4% for 2022.