(Bloomberg) — The relentless selloff in Chinese technology stocks continued in Hong Kong on Monday as a lockdown in Shenzhen, a key sector hub, added to investor angst over geopolitical and regulatory risks.

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The Hang Seng Tech Index slumped as much as 6.5% in early trade, with the sector again at the forefront of losses in Hong Kong and China stocks. The Golden Dragon Index, which tracks American depository receipts of Chinese firms, plunged 10% on two consecutive days last week — something that’s never happened before in its 22-year history.

The tumble follows a spate of events that’s spooked investors, reminding them of regulatory uncertainties from both China and the U.S. The U.S. Securities and Exchange Commission last week named its first batch of Chinese stocks as part of a crackdown on foreign firms that refuse to open their books to U.S. regulators, intensifying worries of delisting risks.

Separately, a Friday report showed Didi Global Inc. has suspended preparations for its planned Hong Kong listing after failing to appease Beijing’s regulatory demands. Also hammering stocks are a growing Covid-19 outbreak in China, concerns over earnings, and a potential spillover from Russia’s war in Ukraine.

“Rationally speaking, Chinese ADR will not be uninvestable, as ADR can convert to HK lines for trading even with delisting,” said Willer Chen, an analyst at Forsyth Barr Asia Ltd. “So now more of panic selling. But sadly the sentiment is hard to change in the short term.”

China’s benchmark CSI 300 index fell as much a 1.9% on Monday, having ended last week with a 4.2% loss in the worst performance since 2008 during the National People’s Congress.

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Both Hang Seng Tech Index and the Nasdaq Golden Dragon Index have lost more than 60% from their peaks, respectively. Alibaba Group Holdings Ltd. sank more than 5% on Monday in Hong Kong while Tencent Holdings Ltd., which is headquartered in Shenzhen, was down as much as 4%.

“We don’t see a major catalyst in the near term,” for China stocks, though earnings results may create some share price volatility, said Marvin Chen, a strategist at Bloomberg Intelligence. “For a material re-rating of China tech, we may need to see a shift in regulatory tone, and we didn’t get that from the recently concluded NPC meeting.”

The historic slide in tech stocks is baffling China bulls, whose number had grown this year as strategists bet on a rebound thanks to policy easing by the People’s Bank of China.

Goldman Sachs Group Inc. strategists toned down their optimism slightly on China stocks, slashing their valuation estimates.

“We stay overweight China on well-anchored growth expectations/targets, easing policy, depressed valuations/sentiment, and low investor positioning,” but lower our valuation target from 14.5 times to 12 times on changes in the global macro environment and higher geopolitical risks, strategists including Kinger Lau wrote in note dated Monday.

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