Chinese stocks tumble further as challenges mount

The rout in Chinese stocks continued on Tuesday, with key indexes falling to their lowest levels in years and battered stocks of China’s two biggest tech titans dropping double-digit percentages.

Selling pressure has built in recent days as investors grapple with growing risks of widespread delisting of Chinese companies in the United States as early as 2024, and signs that Beijing’s longstanding regulatory crackdown has yet to last. .

the war in ukraine also rattled global investor sentiment and heightened the potential for a further deterioration in US-China relations. Meanwhile, a rise in the number of daily Covid-19 cases in China – which the latest figures show has more than doubled – has caused a series of lockdowns, disrupting supply chains and casting a shadow over the outlook. national economies.

After the Securities and Exchange Commission took a step to finally force Chinese stocks off U.S. exchanges, the market is worried “about a possible further escalation between the U.S. and China,” Louisa said. Fok, China equity strategist at Bank of Singapore, the private banking arm. Overseas Chinese banking Corp.

Ms Fok said investor sentiment towards China was very depressed, with Chinese stocks now trading at their steepest declines against other emerging markets in five or six years.

Some of the biggest selling was in the United States, where the Nasdaq Golden Dragon Index plunged 29% in the three trading sessions that ended Monday.

In Asian trading hours on Tuesday, Hong Kong’s benchmark Hang Seng index fell 5.7% to mark its lowest close since February 2016, as tech, financial and property stocks sagged.

Hong Kong-listed shares in Alibaba Group Holding ltd.

sank 12%, while those of rival Tencent Holdings ltd.

down 10%. The once-mighty tech duo have both lost hundreds of billions of dollars in market value over the past year, with Alibaba’s shares down about two-thirds and Tencent’s down more than half, according to FactSet data.

Outside of technology, the biggest losers include Ping An Insurance Group, which fell 13%. Real estate stocks also fell, with the Hang Seng Mainland Properties Index falling 11%.

China’s mainland CSI 300 index of blue chip stocks listed in Shanghai or Shenzhen fell 4.6% to record its lowest close since June 2020, with liquor giant Kweichow Moutai Co.

down 5.7%.

Tuesday’s selloff came despite a slew of better-than-expected economic data, covering areas such as industrial production and retail sales.

As countries ease Covid-19 restrictions, Hong Kong is sticking to a “dynamic zero-Covid” approach – with help from Beijing. A rise in cases has overwhelmed hospitals and is threatening business confidence in the global financial hub. Photo: Bertha Wang/Bloomberg

Write to Quentin Webb at [email protected] and Clarence Leong at [email protected]

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