* Shanghai kicks off Tuesday-Thursday mass testing campaign

* Residents stock up on supplies, fear renewed restrictions

* Nomura estimates 31 cities in China under COVID curbs

By Brenda Goh and Jason Xue

SHANGHAI, July 12 (Reuters) - Shanghai residents queued up in sweltering heat for compulsory mass testing for COVID-19 on Tuesday, as persistent small outbreaks fuelled anxiety in a city that is still recovering from the painful two-month lockdown lifted a few weeks ago.

The nagging daily case tolls in the commercial hub of 25 million and other outbreaks scattered across China have also unnerved global financial markets in recent days, with investors wary of disruptive COVID restrictions.

China's "dynamic zero-COVID" policy aims to eradicate all outbreaks promptly, against a global trend of co-existing with the virus. The world's No.2 economy already suffered severe damage from sweeping COVID restrictions in the second quarter, affecting global supply chains and international trade.

Shanghai authorities have repeatedly dismissed talk of broader curbs, relying on targeted lockdowns and relentless testing to contain outbreaks, which have included infections with the highly-transmissible Omicron BA.5.2.1 subvariant.

But online chat groups used by residents to organise group purchases of basic necessities during the April-May lockdown have livened up again, with people swapping advice over what items were selling out in supermarkets.

"A building nearby was sealed up and I'm thinking of stocking up on some food," said Shanghai resident Wang Jie. "Once my boss allows work from home, I will pack up my luggage overnight and leave Shanghai."

The prolonged isolation has left many mental scars on Shanghai residents, who lost income and struggled with access to basic goods. At times, the frustration led to rare bursts of public anger, with residents banging pots and pans out of their windows in protest.

"When they said last time that we would only be locked down for four days that didn't happen," said another Shanghai resident, declining to give their name. "When they come out and deny rumours we don't believe them now."

More than 200 buildings have been placed under lockdown across Shanghai, which reported 59 new cases for July 11, down from 69 the day before. All but three cases were already under isolation orders.

Residents in some compounds which are not on the official list of targeted lockdowns say they have also been told not to leave their homes for at least two days because close contacts of an infected person lived in those buildings.