Evergrande Fears Spur Major Sell-off Across Industries

(CapitalWatch, Sept. 20, New York) Markets were down across the board Monday on Evergrande crisis fears and the general sell-off in growth stocks, with just a handful of Chinese companies ending the day in green territory.

The real estate and household service sector plunged, with E-Home Household Service Holdings Ltd. (Nasdaq: EJH) tanking 12% to $3 a share. Real estate marketplace KE Holdings Inc. (NYSE: BEKE) tumbled 8% and its smaller rival Fangdd Network Group Ltd. (Nasdaq: DUO) declined 10%. A similar platform, Leju Holdings Ltd. (NYSE: LEJU) dropped 6%, trading just above the required minimum. Xinyuan Real Estate Co., Ltd. (NYSE: XIN) and Fang Holdings Ltd. (NYSE: SFUN) both ended down about 8%.

Further, among the biggest Chinese losers were solar stocks, with JinkoSolar Holding (NYSE: JKS) and ReneSola Ltd. (NYSE: SOL) both down about 10%, Daqo New Energy Corp. (NYSE: DQ) down 8%, and Canadian Solar Inc. (Nasdaq: CSIQ) ending 7% lower. These were hurt as a potential economic slowdown would reduce the demand for solar projects. In addition, the solar sector has relied on low-interest financing, which could change.

Another set of big losers were electric vehicle makers, with XPeng Inc. (Nasdaq: XPEV; HKEX: 9868) and Nio Inc. (NYSE: NIO) down 6% and Li Auto Inc. (Nasdaq: LI; HKEX: 2015) taking a 7% tumble. The three have been trading lower lately after China's industry and information watchdog said there were "too many" EV companies and a consolidation is needed.

Tech conglomerates were seeing a smaller decline by comparison, with Tencent Holdings (OTC: TCEHY; HKEX: 0700) down 4%, Baidu Inc. (Nasdaq: BIDU; HKEX: 9888) and JD.com Inc. (Nasdaq: JD; HKEX: 9618) both sliding 5%, and NetEase Inc. (Nasdaq: NTES; HKEX: 9999) ending 3% in the red. Shares in Alibaba Group (NYSE: BABA; HKEX: 9988) hit another 52-week low intraday, at $149.09 per share, and bounced back a bit by day's end, closing at $151.49 per share, with a 5% drop.

This week, real estate titan China Evergrande Group (HKEX: 3333; OTC: EGRNF) is expected to miss some bank payments on its $300 billion debt. Unless Beijing steps in, the result may be devastating in the financial markets as it will drag down other parties in a domino effect due to Evergrande's size and spread across various industries.