(Bloomberg) — U.S.-listed Chinese stocks resumed a steep selloff on Monday as concerns about Beijing’s close relationship with Russia added to losses spurred by its crackdown on tech giants and the growing risk of U.S. delistings.
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The Nasdaq Golden Dragon China Index declined 12% to its lowest level since July 2013, adding to last week’s rout. American depositary receipts of e-commerce giant Alibaba Group Holding Ltd. and rival JD.com Inc. dropped at least 10% each, while Pinduoduo Inc. tumbled 21%. Search-engine operator Baidu Inc. fell 8.4%. Alibaba has plunged more than 30% this year to its lowest level since June 2016.
The slump followed a report that Russia had asked China for military assistance for its war in Ukraine. Even as China denied the report, traders worried that Beijing’s potential overture toward Vladimir Putin could bring a global backlash against Chinese firms, even sanctions. The U.S. and China will hold their first high-level, in-person talks since the invasion today.
Other negative headlines included Tencent Holdings Ltd. reportedly facing a possible record fine for violations of anti money-laundering rules, as well as the lockdown of Shenzhen for at least a week after virus cases doubled nationwide.
Panic Selling Grips Chinese Stocks in Biggest Plunge Since 2008
“There’s horrible, awful sentiment around China,” said Vital Knowledge’s Adam Crisafulli. “De-listing fears and renewed Covid pressures delivered a double-whammy to the few bulls left. There’s wholesale liquidation and even optimists think the space is just too hard right now. Valuations may be cheap and the PBOC is one of the few central banks easing policy, but this isn’t enough.”
Adding to the sentiment, JPMorgan Chase & Co. analysts downgraded Chinese internet stocks to sell-equivalent ratings, including JD.com, Alibaba and Tencent, calling them “uninvestable” in the near-term. “Due to rising geopolitical and macro risks, we believe a large number of global investors are in the process of reducing exposure to the…