China’s zero-Covid policy has put its stocks on track for their worst month in six years, as investors and analysts warn of deeper losses to come on concerns that Beijing could miss its growth target for the first time.
Souring sentiment has pushed the country’s CSI 300 stock benchmark down 10 per cent this month, with traders dumping Chinese equities in the face of harsh lockdowns in cities including Shanghai, the country’s largest port and financial centre. With the possibility of a lockdown in Beijing looming, more investors are worrying the worst may lie ahead.
“Global markets have been playing catch-up in recognising the severe consequences of China’s zero-Covid strategy,” said Ting Lu, an analyst at Nomura, which recently slashed its China growth estimate to 3.9 per cent.