China stocks climb, but Taiwan equities tumble as rising COVID-19 cases force fresh restrictions

Fresh data out of China showed an easing of growth last month, with industrial output up 9.8% in April from a year earlier, versus March’s 14.1% increase, the National Bureau of Statistics said Monday. The result still beat a 9.1% increase expected by economists polled by The Wall Street Journal.

Retail sales climbed 17.7% last month, but well off a 34.2% jump in March and falling short of the 24.9% increase expected economists. The slowing data reflects more of a normalization for China as it began rebounding from the pandemic last April.

Elsewhere, investors were keeping a close eye on rising COVID-19 cases. Taiwan reported a record single-day rise of 203 cases on Sunday, and the government imposed new restrictions for Taipei City and New Taipei City beginning Saturday. That meant shutdowns for leisure and entertainment venues: singing and dance venues, bars and clubs, hair salons, bowling alleys, gyms and fitness and recreational centers, along with internet cafes and other venues.

Taiwan is also home to Taiwan Semiconductcor Manufacturing TSM, +3.41%, a dominant chip maker whose role has been amplified amid a global shortage of chips, notably in the auto industry. Those shares finished 1.4% lower.

But stock losses were limited after “Government suggestions that they are preparing to intervene to support equities,” Jeffrey Halley, senior market analyst at foreign exchange broker OANDA, told clients in a note.

Singapore, meanwhile, will shut schools this week after reporting 38 new cases of Covid-19 infection, a level not seen in more than a year.

“Malaysia, already under an aggressive nationwide restriction regime, faces spiraling cases, as does Thailand, while Japan enlarged the number of prefectures in states of emergency,” said Halley.

“In the bigger picture, it is mainland China that matters from a coldhearted economic perspective. An explosion of local transmission there would cause the Asian and global recovery story to be re-evaluated. Thankfully, there is little sign of that outcome occurring,” added Halley. “A close second for the rest of Asia, is the effectiveness of the national restrictions being imposed. The following month will be critical.”

U.S. stock futures ES00, -0.30% NQ00, -0.34% YM00, -0.34% turned lower on Monday, while oil prices CL.1, -0.08% also slipped.