The losses in Chinese language shares got here because the nation battles an intensive wave of Covid outbreaks. All mainland Chinese language provinces have recognized domestically transmitted Covid-19 instances up to now 10 days, in response to CNN’s calculations based mostly on knowledge from the Nationwide Well being Fee.

The quick unfold of instances has sparked worries about extra lockdowns. Earlier this yr, China positioned Shanghai and different key cities beneath strict lockdowns for months, hammering shopper exercise and disrupting international provide chains.

“The implementation of virus restrictions in a number of components of [China’s] largest cities continues to spotlight its battle in containing spreads,” mentioned Yeap Jun Rong, a market strategist at IG Group, including that Beijing’s powerful stance on zero-Covid means the nation’s progress prospect might stay subdued.

Additionally upsetting buyers is information that China’s huge manufacturing trade continued to shrink in August amid the nation’s worst warmth wave in six many years.

A authorities survey launched on Monday confirmed that the manufacturing Buying Managers’ Index rose to 49.Four in August from 49 in July, however remained in contraction territory. The 50-point mark separates contraction from progress.

“Financial actions stayed weak in August, partly resulting from energy scarcity brought on by warmth waves,” mentioned Zhiwei Zhang, president and chief economist at Pinpoint Asset Administration, in a word on Wednesday.

The facility disaster has eased this week, with vitality provide to industrial customers being restored in Sichuan and Chongqing. However the primary constraint for the financial system — the zero-Covid coverage — has not been eliminated, analysts warned.

“The disruption from the facility shortages is now receding,” however the Covid state of affairs is “worsening once more,” wrote Julian Evans-Pritchard, senior China economist for Capital Economics, in a report on Wednesday.

“For now, the ensuing disruption seems modest however the specter of damaging lockdowns is rising,” he mentioned.

— CNN’s Beijing bureau and Simone McCarthy contributed to this report.