The sales pressure has built up in recent days as investors face the growing risks of widespread US delistings of Chinese companies as early as 2024 and signs that Beijing’s long-term regulatory action will continue.
The war in Ukraine has also weakened global investor sentiment and increased the potential for a further deterioration of US-China relations. Meanwhile, a rise in China’s daily number of cases of Covid-19 – which recent figures show has more than doubled – has prompted a series of shutdowns, disrupted supply chains and cast a shadow over the economy.
“There are definitely a lot of strangers there,” said Mike Bailey, research director at FBB Capital Partners. “The question is, are you being paid to take that risk? The answer is ‘no’ in our opinion.”
Mr. Bailey said he left most of his exposure to China and new markets during the pandemic and poured the money back into US bets. He remains bearish on China.
During Asian opening hours on Tuesday, Hong Kong’s benchmark Hang Seng index fell 5.7% to its lowest close since February 2016, when technology, finance and real estate stocks withered. In the US, where some of the biggest sales have taken place, some Chinese listed companies came back on Tuesday. The Nasdaq Golden Dragon China Index, which includes China-focused U.S. listed companies, rose 5 percent. Still, it has fallen 39% this year and has fallen by about three quarters from its highest point.
US-listed shares in Tencent Music Entertainment Group and Yum China Holdings Inc. were among stocks that rose in trading Tuesday, although they are still sitting on double-digit losses this year. Tencent Music rose 15%, while Yum China jumped 8.3%.
After the Securities and Exchange Commission took a step towards eventually forcing Chinese equities away from US stock markets, the market is worried “about a potential further escalation between the US and China,” said Louisa Fok, China’s equities strategist at the Bank of Singapore. The Private Banking Division of Oversea-Chinese Banking Corp.
Ms. Fok said investors’ sentiment towards China was very depressed, with Chinese equities now trading at their biggest price decline compared to other emerging markets in five or six years.
So far this year, sales have shaved $ 132 billion from the market value of Alibaba Group Holding Ltd., whose U.S.-listed shares fell 1.3% on Tuesday, according to Dow Jones Market data
It built on an earlier sale in Asia on Tuesday, where Hong Kong-listed shares in Alibaba fell 12%, while shares in rival Tencent Holdings Ltd. withdrew 10%.
Shares in Internet companies have been particularly penalized. KraneShares CSI China Internet ETF fell 12% on Monday, its biggest one-day fall ever, to its lowest level since it began trading in 2013, according to FactSet data. It rose 3.6% in the most recent trade on Tuesday.
“The decline in Chinese Internet companies’ shares over the past 13 months has been even worse than the comparable period for U.S. technology stocks in the early 2000s,” Jessica Rabe, co-founder of DataTrek Research, wrote in a note to customers early Tuesday. .
The fund has fallen about 79% from the highest level ever and it has been about 270 trading days since it peaked. At the same time in 2001, the technology-heavy Nasdaq had fallen about 65% from its dot-com bubble top, according to Ms. Rabe.
Outside of technology, big losers in Asia included Ping An Insurance Group, which fell by 13%. Real estate stocks also retreated, with the Hang Seng Mainland Properties Index falling 11%.
The Chinese mainland CSI 300 index for blue-chip stocks listed in either Shanghai or Shenzhen fell 4.6% to record its lowest close since June 2020, when liquor giant Kweichow Moutai Co. fell 5.7%.
Tuesday’s sales came despite better-than-expected economic data spanning areas such as industrial production and retail sales.
This story has been published from a telecommunications agency feed with no changes to the text
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