Concerns that Beijing could be headed for a Shanghai-style lockdown that could further damage China’s economy were growing Monday after the Chinese capital reported a spike in Covid-19 cases.
Authorities in Beijing ordered 3.5 million residents in the biggest district of Chaoyang to undergo three rounds of mass testing this week and shut down some residential areas in a bid to contain the spread of the virus. The move sparked panic buying at supermarkets as residents hastened to stockpile essentials.
China already is trying to contain a spike in Covid infections in the economic hub of Shanghai, where more than 25 million residents have been locked down for weeks.
The rising cases threatens to exacerbate disruption to global supply chains. Apple (ticker: AAPL) supplier Hon Hai Precision Industry,
also known as Foxconn Technology Group, paused operations at two of its factories in China’s Kunshan, a city close to Shanghai, after new Covid-19 cases were reported on site, the South China Morning Post reported.
In a statement, reported by Reuters, Foxconn said the suspension of operations would have a limited effect as production had been shifted elsewhere.
The deteriorating outlook dragged down the commodities. Iron ore futures in Singapore dropped as much as 11% in response to the negative sentiment and were recently 6.2% lower at $141.40 a ton. The onshore yuan fell to its weakest in a year, while oil dropped about 3% to trade below $100 a barrel.
“Lockdowns in China — and fears that these will spread and persist — is hitting sentiment in commodity markets. US oil futures slid $4 to $98, whilst Brent slid a similar amount to $102,” said Neil Wilson, chief market analyst at markets.com.
Write to Lina Saigol at [email protected]
Credit: www.marketwatch.com /