(Bloomberg) -- Chinese stocks are getting knocked down in U.S. hours after suffering intense swings in Asia, with the group heading toward its worst session since the global financial crisis.
The Nasdaq Golden Dragon China Index plunged more than 10% on Thursday, heading toward its biggest slide since October 2008. American depositary receipts of megacaps like Alibaba Group Holding Ltd. and Baidu Inc. tumbled at least 6.5%, with electric-vehicle companies including Nio Inc. and XPeng Inc. each down over 10%.
Aside from the geopolitical concerns that have caught many global investors off guard, Chinese stocks have been under intense pressure after months of regulatory crackdowns. Thursday’s selloff is a swift change of fortunes for the nation’s shares traded in the U.S. Just a day before, the group jumped the most in more than a month amid a broad-based rally in risk assets and speculation that Chinese authorities had stepped in during the Asian day to support the domestic market.
Investors in Hong Kong were treated to an equally wild day of trading Thursday, with the Hang Seng Tech Index climbing as much as 4.4%, turning negative before closing higher by about 1%. That follows a similarly volatile session on Wednesday.
The U.S. Securities and Exchange Commission this week identified five Chinese firms under the Holding Foreign Companies Accountable Act, which it says the Public Company Accounting Oversight Board was unable to inspect. The newly identified firms -- BeiGene Ltd., Yum China Holdings Inc., Zai Lab Ltd., ACM Research Inc. and HUTCHMED (China) Ltd. -- could be subject to delisting from U.S. exchanges if they fail to comply with the HFCAA’s auditing requirements for three consecutive years.
“The renewed delisting concerns is the primary driver for the the brutal selloff in Chinese ADR companies,” said Brendan Ahern, chief investment officer at KraneShares. The combined with Russia-Ukraine tensions and smaller climb in Hong Kong shares overnight are also impacting U.S. trading, he added.
Still, some analysts aren’t convinced that the addition of these stocks constitutes an escalation in the U.S. crackdown on Chinese firms, with Nomura’s Donnie Teng, who called the addition a “non-event.”