U.S.-listed Chinese tech companies such as Alibaba, Baidu, JD.com and Pinduoduo dropped Monday, falling by double-digit percentages, as Xi Jinping’s tighter grip on power in China rattled investors.
The frantic selling in the companies' American depositary receipts echoed declines in Hong Kong, where Chinese internet and technology shares led a wider market rout.
Other U.S. decliners included NIO, the electric-car maker.
Hong Kong's Hang Seng Index fell 6.4% Monday, after Mr. Xi cemented his control over China’s ruling Communist Party. That was the benchmark's biggest one-day decline since the global financial crisis.
Economists said markets were surprised by the extent to which Mr. Xi had packed the party’s top leadership with his allies.
“Investors are now repositioning for a China where Xi Jinping rules supreme in an echo chamber of sycophants. For him, ideology and national security trump all other considerations, including growth,” said Diana Choyleva of Enodo Economics.
Gareth Leather, senior Asia economist at Capital Economics, said a rift with the U.S. that began under former U.S. President Donald Trump was likely to intensify. “This decoupling that we've seen since Trump and the trade war is likely to continue and accelerate,” he said.
Alibaba's ADRs traded below $68, the price at which the e-commerce giant went public in its blockbuster 2014 initial public offering. U.S.-listed Chinese stocks, as reflected by a key Nasdaq index, have already fallen to multiyear lows in recent days.
The selling wasn’t limited to technology stocks. For instance, U.S.-listed shares in Yum China, which operates KFC and Pizza Hut in China, stood about 12% lower.
Read all of today's Journal coverage of China-related markets news here.
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October 25, 2022 at 06:39AM
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Stock Market Today: Dow Closes Up More Than 400 Points, U.S.-Listed Chinese Stocks See Big Drop - The Wall Street Journal
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