(Bloomberg) — Chinese stocks listed in the U.S., including China Telecom Corp. and Pinduoduo Inc., fell on the prospect of further sanctions that would remove more of the Asian nationâ€™s biggest companies from American stock exchanges.
Declines were led by a group of Chinese telecommunications stocks Monday after the New York Stock Exchange said it will delist three companies to comply with a U.S. executive order. The weakness initially leaked over into the energy industry where investors bet oil producers may be next in line.
While the companies are mostly traded in Asia, they have American depositary receipts which allow U.S. investors to trade the stocks domestically. NYSEâ€™s move follows an order from U.S. President Donald Trump in November which barred American investments in China-based firms that are affiliated with the military.
Losses for the trio of telecom firms were led by China Telecom Corp.â€™s 5.5% drop to the lowest since 2003. China Mobile Ltd. fell 5.9% to a 2006 low, and China Unicom Hong Kong Ltd. slipped as 3.2%. Oil majors like China Petroleum & Chemical Corp., also known as Sinopec, and PetroChina Co. were mixed after an initial decline in New York trading.
China Telecom options were delisted by CBOE Exchange Inc. on Dec. 31. China Mobile and China Unicom Hong Kong options were still available for trading on Monday, however, derivatives for both firms are not heavily traded.
Video: NYSE to delist three Chinese telecom giants (Reuters – US Video Online)
China internet stocks also fell, with Pinduoduo down 6.1%,Alibaba Group Holding Inc. losing 2.1% and JD.com Inc. sliding 1.8%. The tech stocks have come under additional pressure as Chinese regulators tightened fintech regulations and launched an antitrust probe into Alibaba.
Despite the choppiness in Mondayâ€™s trading, Chinese electric-vehicle makers surged, led by Nio Inc. and Li Auto Inc., after strong growth in December vehicle deliveries. The iShares China Large-Cap ETF fell 0.3% after inially trading higher.
(Updates with details on options in fifth paragraph, share prices throughout)
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