Shanghai Stock Exchange drops 5.1% and drags other Asian markets

Asian stocks closed lower on Monday, with losses led by markets in China, which tumbled amid renewed concerns about the impact of the current wave of Covid-19 on the world’s second-largest economy.

The prospect of more aggressive rate hikes in the US, which sent Wall Street crashing last week, also undermined sentiment in Asia.

China’s main stock index, the Shanghai Composite, dropped 5.13% today, the most since February 2020, to 2,928.51 points, its lowest level since June 2020. The Shenzhen Composite showed an even more significant loss, of 6, 48%, at 1,790.03 points.

In Beijing, the Chinese capital, 22 new cases of covid-19 were recorded on Sunday (24), the highest number this year.

In Shanghai, there were 39 deaths from the disease on Saturday (23), a number more than three times higher than the previous day.

Signs of the pandemic worsening have heightened fears about China’s slowdown, which were already evident in March.

Elsewhere in Asia, Japan’s Nikkei dropped 1.90% in Tokyo to 26,590.78 points, while Hang Seng dropped 3.73% in Hong Kong to 19,869.34 points, South Korean Kospi dropped 1, 76% in Seoul, at 2,657.13 points, and Taiex recorded a loss of 2.37% in Taiwan, at 16,620.90 points.

The bad mood on the Asian continent also came after the New York stock exchanges closed the trading session on Friday (22) with losses of more than 2.5%, after a week of multiple evidences that the Federal Reserve (Fed, the US central bank) does indeed plan to raise interest rates at a faster pace starting in May.

In Australia, where Oceania’s main stock exchange is located, there were no trades on Monday due to a national holiday.

With information from Dow Jones Newswires