Counterintuitively, since the initial outbreak in 2020, index returns were positively — not negatively — correlated with the number of cases, according to Goldman Sachs Group.
The lockdown in Shanghai, accompanied by media accounts of food shortages and unreported deaths, are evoking painful recollections of January 2020 and the central city of Wuhan, where Covid first broke out.
For investors, the memory will also include the economic stimulus that China unleashed then to fight off a recession — as well as the bull market that ensued. That may explain why China’s main stock indexes have not sunk below their mid-March low, even as the number of Covid cases soared.
