(Bloomberg) -- Chinese stocks fell as a lockdown in Shanghai to combat a virus flareup raised worries over disruptions to business operations and the toll on economic growth. 

The CSI 300 Index declined by as much as 1.5% early Monday as the city said it will lock down in two phases to conduct a mass testing blitz. Consumer staples and consumer discretionary sectors were the biggest decliners. 

Lockdowns add uncertainties to the outlook for Chinese equities, with investors already grappling with regulatory headwinds including a potential delisting of domestic firms from American exchanges, and the fallout from the war in Ukraine. Shanghai is home to the Chinese headquarters of many international companies and the country’s largest port.   

“Market will be affected, trading volume will be down as traders focus on the impact on Shanghai’s GDP that’s 4.32 trillion yuan, or 4% of China,” Hao Hong, head of research and chief strategist at Bocom International Holdings Co. said in an email. “Other cities may heed from Shanghai’s tactics to combat the virus spread, and thus the impact on GDP will widen.”

Shanghai’s stock exchange said it will provide online services over IPO approval meetings, consultations and road shows, while also extending the time window for listed companies’ statement releases to 11 p.m.

Chinese authorities pledged strong support for the economy and markets via a slew of initiatives earlier this month, but the government’s zero-tolerance approach to the virus is putting pressure on growth. The CSI 300 Index is down more than 15% this year, the worst-performing national gauge in the region.

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