Concerns about demand in China after a surge in COVID-19 cases has market watchers worried. China posted a steep jump in daily infections on Tuesday, with new symptomatic cases more than doubling from a day earlier to a two-year high as a virus outbreak expanded rapidly in the country's northeast, according to Reuters.

Share Market Live

NSE

Speaking to CNBC-TV18, Simon Powell of Jefferies and Shaun Rein, China market researcher, said that Shenzen shutting down will impact global supply chains, especially the auto sector.

Shenzhen has shut down for 7 days... That will have a major impact on the global supply chain. The auto sector has not been impacted much, since not much is exported from Shenzhen," said Shaun Rein.

Also read | Russia-Ukraine war LIVE: Biden warns China to not help Putin

A fast-spreading variant known as stealth omicron is testing China's zero-tolerance strategy, which has previously kept the virus at bay after a deadly initial outbreak in early 2020.

However, China will not lift its zero-tolerance policy any time soon, according to Simon Powell.

"Hong Kong has gone from 0 to 500 Covid deaths per million people in a very short span." he noted adding, "(We) will see dampened oil demand if we continue to see China's zero-tolerance.

In the past week, new COVID cases have been reported in Beijing and the financial hub Shanghai - China's most populous cities - as well as in the provinces of Guangdong, Jiangsu, Shandong and Zhejiang along the coast.

While the number of infections is small compared with caseloads elsewhere in the world, the rapid rate of increase has activated China's dynamic zero COVID policy, which mandates that infections be quickly identified and contained.

For a ball-by-ball coverage of today's (March 15) market action, click here

(Edited by : Abhishek Jha)