Asian markets slide on inflation, Covid fears

Asian stocks closed lower on Monday in cautious trade, as figures showed China's economic growth accelerated in the first quarter of the year, but the government warned of  "significant challenges" ahead.

Tokyo's benchmark Nikkei 225 ended down more than one percent and Shanghai posted small losses, while Hong Kong and Sydney were closed for holidays.

Shanghai reported its first Covid-19 deaths since the start of its weeks-long lockdown.

China's largest city and economic powerhouse has stewed under a patchwork of restrictions this year amid the country's worst Covid-19 outbreak since the start of the pandemic.

The country reported first-quarter economic growth of 4.8 per cent, the National Bureau of Statistics said, as the pandemic threatens Beijing's ambitious annual growth target. That figure was up from 4.0 per cent in the final months of 2021.

The world's second-biggest economy was already losing steam in the latter half of last year as it endured a property slump and regulatory crackdowns.

"We must be aware that with the domestic and international environment becoming increasingly complicated and uncertain, economic development is facing significant difficulties and challenges," said NBS spokesman Fu Linghui.

"Overall, the data suggest that China started the year well, but as the quarter has moved on, the headwinds have gotten stronger," said Jeffrey Halley, senior market analyst with OANDA.

"A slowing property market, sweeping Covid restrictions, the Ukraine invasion pushing up base commodity and energy prices, and a central bank still intent on deleveraging sectors of the economy, have all combined to weigh on China's growth.