China stocks listed in the U.S. steepened last week's sharp losses Monday. The shooting down of a suspected Chinese spy balloon over the weekend was seen to puncture optimism about warming U.S.-China relations.
Chinese shares traded in mainland China and Hong Kong also fell Monday. That partly followed U.S. stocks' declines after the strong jobs report Friday. There are also concerns that the China reopening rally had gone too far.
On Monday, the South China Morning Post reported that China lodged a formal complaint with the U.S. embassy in Beijing. Chinese officials claimed the civilian airship was "attacked" by American forces and the move would "seriously hamper" recent progress in stabilizing U.S.-China ties.
China Stocks Deflate
Among the best China stocks to buy and watch, JD.com shed 2.2% to 56.38 Monday, following a 9.6% tumble last week. JD stock is working on a 67.19 handle buy point in a long consolidation going back to August 2022 or even July. But JD.com undercut its 50-day on Friday and is testing its 200-day.
Other China-based stocks trading in the U.S. also fell to start the week. Pinduoduo lost 4.7% to 91.16, extending an 8.6% rout last week. PDD stock fell through its rising 21-day line intraday.
Alibaba gave up 2.3% to 103.91 Monday, after plunging 10.1% last week.
Chinese EV startup Nio retreated 3.3% to 10.82, following an 11.9% decline last week. Peers Li Auto and Xpeng fell around 2% each.
New Oriental Education & Technology slid 7.6% to 38.76, undercutting a rising 21-day line. EDU stock shed 4.5% last week.
Among China exchange traded funds (ETFs), the KraneShares CSI China Internet ETF declined 3.6% following last week's 6.9% tumble. The Xtrackers Harvest CSI 300 China A-Shares ETF and iShares MSCI China ETF, which track Chinese stocks trading on the Hong Kong and Shanghai exchanges, lost 1.1% and 2.4%, respectively.
On Monday, the mainland benchmark CSI 300 index fell 1.3% while Hong Kong's Hang Seng Index dropped 2%.
China Spy Balloon Shooting Hurts Market Sentiment
The China spy balloon was tracked over Alaska and parts of Canada before flying across to the coast of South Carolina, where it was spotted and raised alarm among U.S. officials.
On Friday, Secretary of State Antony Blinken delayed a planned visit to Beijing over the presence of the surveillance balloon in U.S. airspace.
The U.S. military downed the balloon on Saturday. Chinese authorities called the move a "serious violation of international practice" and an "obvious overreaction."
The Pentagon maintains that the balloon was used for surveillance. But China insists it was used for weather research and accidentally strayed off course, the Post says.
Analysts called the incident a reminder that the U.S. and China are still mired in distrust.
Last year, China stocks listed in the U.S. took a broad battering. That was due in part to fears about a U.S. delisting of Chinese shares and other disputes between the two major world powers.
