The news that China has a new Covid-19 crisis and is seeing an increase in new cases caused shares to plummet on the Asia-Pacific stock markets.

Indexes of mainland China suffered the greatest losses, with Shenzen declining 6.08% on 10,379.28 while the falling 5.13% at 2,928.51.

Hong Kong’s lost 3.57% after the Hang Seng Tech index plummeted 4.43%. Bilibili, a Chinese company that owns 80% of the world’s largest companies (NASDAQ:), and Alibaba (NYSE:) fell 5.24%, and 4.96% in Hong Kong trading.

Japanese index lost 1.9% at 26,590.78, with the losing 1.5% at 1,876.52. South Korean index dropped 1.76% at 2,657.13, while the fell 1.5% to 1,876.52.

European stocks also fell by more than 2% at the start of the day.

“It’s no surprise and it makes all sorts of logical sense that the market should be concerned about the Covid situation because that clearly is impacting economic activity. It’s impacting earnings potential for many parts of the market,” said Timothy Moe, head Asia-Pacific equity strategist at Goldman Sachs.

Beijing authorities said in a statement that the pandemic has spread undetected in China’s capital and expects to report more positive cases.

Beijing initiated a 3-day mass testing in the city’s main business district of Chaoyang on Monday, where many embassies and foreign companies have their offices. Testing revealed that Chaoyang was responsible for most of the coronavirus new cases in Beijing since Friday.

District officials halted all group activities in person, including art classes and training for sports. According to the Chinese state media, local authorities advised Chaoyang residents to stay at home and work remotely.

China faces the most severe coronavirus pandemic since 2020, and this is reflected in the escalating number of cases in Bejing. China is implementing a zero-Covid strategy to stop the spread of this virus. This includes travel restrictions and lockdowns.

By Senad Karaahmetovic