Stock markets in China and Hong Kong entered the new trading week with a relatively significant decline. A growing number of newly confirmed cases of covid in the region and China’s deteriorating economic outlook are behind the poor investor sentiment.
Increase in coronavirus cases
The Shanghai Stock Exchange’s composite index lost 2.6 percent on Monday. The CSI300 index, which includes the best-performing titles, has even written off over three percent. The biggest drop in the last month is mainly due to the increasing number of newly confirmed coronavirus cases in mainland China. Investor nervousness is also heightened by the current inflation rate, which in China climbed to 8.3 percent year-on-year in March. The market was expecting inflation to be slightly below 8%.
The bad mood from Shanghai also spread to other Asian stock exchanges. Hong Kong’s Hang Seng index fell 3.03 percent, dragged down mainly by the Chinese corporate sector. Tokyo’s Nikkei weakened by 0.61 per cent, while the Indian stock exchange in Mumbai also lost similarly, with technology stocks falling. Experts also attribute this to the ongoing war in Ukraine.