SYDNEY (Reuters) - Asian shares got the week off to a cautious start on Monday, with Chinese markets holding steady, as a spike in coronavirus cases across the region over the weekend hurt investor sentiment while oil hovered around 2-1/2 year highs. MSCI’s broadest index of Asia-Pacific shares outside Japan was last a shade weaker at 702.57. Australian shares slipped 0.2%. South Korea’s benchmark KOSPI was barely changed as was Japan’s Nikkei. Investors were concerned about a spike in coronavirus infections in Asia with Australia’s most populous city of Sydney plunging into a lockdown after a cluster of cases involving the highly contagious Delta strain ballooned. Indonesia is battling record high cases while a lockdown in Malaysia is set to be extended. Thailand too announced new restrictions in Bangkok and other provinces. Chinese shares were a touch higher with the CSI300 index up 0.2%. Data over the weekend showed profit growth at China’s industrial firms slowed again in May as surging raw material prices squeezed margins and weighed on factory activity. Investors will keep a close eye on official factory activity from China due Wednesday. The manufacturing reading is expected to slow to 50.7 from 51. The private sector Caixin Manufacturing PMI will follow later in the week. Last week, global shares reached record highs as weaker-than-expected U.S. inflation and news of a bipartisan U.S. infrastructure agreement boosted risk appetite. The infrastructure plan is valued at $1.2 trillion over eight years, of which $579 billion is new spending. “Investors are keenly watching the progress of U.S. President Biden’s bipartisan infrastructure deal through congress. The package could boost demand significantly, driven by investment in renewables and electronic vehicle (EV) infrastructure,” ANZ analysts wrote in a note. Oil prices climbed to their highest since October 2018 in early Asian trading on expectations demand growth will outstrip supply and OPEC+ will be cautious in returning more crude to the market from August. Brent futures rose 12 cents to $76.30 a barrel, while U.S. crude added 13 cents to $74.18. On Friday, the S&P 500 rose 2.7% for the week, its strongest weekly gain since early February after data showed a measure of underlying inflation rose less than expected in May, easing fears of a sudden tapering in stimulus by the Federal Reserve. The Dow climbed 0.7% while the tech-heavy Nasdaq dropped 0.06% after holding near the previous session’s record high. Later in the week, a closely-watched U.S. jobs report will be released for June which could point to strong labour demand. Yields for benchmark 10-year U.S. Treasuries, jumped back above 1.50% to close out a week in which rates notched their largest gains since March. Monetary and fiscal stimulus around the world in response to the COVID-19 pandemic is boosting financial assets, despite an uneven pace of recovery between regions. Boston Federal Reserve Bank President Eric Rosengren on Friday warned a build-up of financial stability risks linked to a low interest rate environment could lead to another downturn that interrupts the labour market recovery and impedes a return to maximum employment. In currencies, the U.S. dollar was slightly firmer at 91.846 against a basket of other currencies. The Japanese yen weakened to 110.65 versus the greenback and the euro eased to $1.1925. An appreciating dollar took some lustre off gold with prices prices down 0.4% at $1,771.9 an ounce. Editing by Shri Navaratnam Our Standards: The Thomson Reuters Trust Principles.