Stocks in mainland China dropped to a one-week low on Monday, as traders weighed the economic fallout from a resurgence in Covid-19 cases in several provinces, while the market watchdog clarified its stance on contentious listings in offshore markets. The Shanghai Composite Index slipped 0.1 per cent to 3,615.97 at the close. The ChiNext gauge of start-ups in Shenzhen also fell by that much. Shenzhen Pacific Union Precision Manufacturing gained 7.9 per cent on its debut on Shanghai’s Star Market. Consumer staple and technology stocks provided the biggest drag on the benchmark, with their sub indexes falling by at least 0.3 per cent, while consumer discretionary and health care names were the best-performing industry groups. Trading was light, with the equity markets in Hong Kong and the Stock Connect trading linking them with mainland Chinese bourses shut for a public holiday. Turnover in Shanghai was 16 per cent below its 30-day average for this time of the day, according to Bloomberg data. In Shenzhen, the volume was 10 per cent lower than the average. “The market is facing the challenges of economic slowdown, growing Covid-19 infections and a vacuum in earnings reports,” said Zhu Bin, a strategist at Southwest Securities. “So sideways trading will probably persist until the annual results season next year.” China reported 158 new cases on Sunday in its most severe outbreak since January. Among these infections, 157 were found in the northwest Shaanxi province and one in southern Guangxi, according to official reports. Omicron: China’s tourism industry braces for fallout as a surge in Covid-19 puts peak travel season in jeopardy The resurgence has prompted strict lockdowns in some locations and hobbled several car-making plants, threatening efforts to revive growth in the world’s second-largest economy. China has injected liquidity while banks trimmed borrowing costs this month in signs of policy easing. Meanwhile, the China Securities Regulatory Commission late on Friday said it will allow local companies to sell shares overseas as long as they register with regulators and meet compliance requirements. This will also apply to companies with so-called variable interest entity structures , it added. That is expected to add some optimism for China’s offshore stocks, particularly the technology companies that have lost more than US$1 trillion in market value over the past year.