Pinduoduo, Alibaba Lead Chinese ADR Decline Amid Lockdown Woes

(Bloomberg) — U.S.-listed Chinese stocks look set to open in the red on Monday as expanded Covid lockdown measures in major cities sparked concerns over the country’s economic growth outlook.

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Pinduoduo Inc. led a decline in American depositary receipts, down 4.7% in premarket trade. E-commerce peers Alibaba Group Holding Ltd. fell 3.9% and JD.com Inc. lost 2.5%. Electric carmakers including Nio Inc. and Li Auto Inc. also fell. The weakness tracks a 4.9% slump in China’s CSI 300 Index, which closed at its lowest level in two years.

Rising Covid cases in Beijing have stoked fears of a citywide lockdown, with China’s capital already putting some residential compounds under restrictive measures. Financial hub Shanghai reported record fatalities on Saturday, a month after the city came to a standstill.

Concerns about the economic costs of prolonged lockdowns, together with lingering delisting threats and muted economic support, have put U.S.-listed Chinese shares under pressure in recent sessions. The Nasdaq Golden Dragon China Index has dropped 15% since Beijing vowed to stabilize financial markets on March 16.

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“More than a month after China policymakers announced easing measures were incoming, investors have been left underwhelmed as lending rates were left unchanged in April,” Bloomberg Intelligence equity strategist Marvin Chen wrote in a note. The window of opportunity for more aggressive easing is getting smaller as the yuan continues to weaken, Chen said.

Elsewhere, China has asked 18 major online platforms, including some from Weibo Corp., Baidu Inc. and Zhihu Inc. to improve their systems to deal with violence on the internet. Baidu shares dropped 3.8% while Zhihu was down as much as 7% in U.S. premarket trading.