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US-listed Chinese stocks see November’s first weekly drop

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(Bloomberg) — U.S. sugar stocks plunged on Friday, their first weekly decline this month, as a rise in Covid cases and mounting restrictions across the country damaged optimism that restrictions would soon be lifted. Will be taken

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The Nasdaq Golden Dragon China index of 65 Chinese stocks is down 3.2%, bringing the benchmark’s weekly loss to 5.9%. Internet stocks including Alibaba Group Holding Ltd and JD.com Inc each fell more than 4%, while online lender Lufax Holding Ltd plummeted 25% after lowering earnings expectations.

While Chinese stocks rallied earlier this month in hopes of a reversal of Beijing’s zero-tolerance stance on the pandemic, China’s fight to contain a wave of new infections has provided a reality check for investors this week. Nationwide Covid cases topped 30,000 for the first time on Thursday, forcing many areas to impose restrictions.

Zhengzhou, home to the largest iPhone manufacturing site, has been effectively locked down for five days. The rising cases led to containment measures and panic buying in some districts of Beijing. The restrictions come after China issued a 20-point playbook earlier this month calling on local authorities to ramp up testing and ease restrictions on movement.

Still, Wall Street is becoming bullish on Chinese stocks, with Bank of America strategists making the latest recommendation to buy the country’s stock before 2023. The government’s commitment to stimulate the ailing economy with monetary policy, including a reduction in the required reserve ratio on Friday, also raised hopes.

The Golden Dragon Index is up 20% in November for its best month since September 2007. The MSCI China Index is up 21% on Thursday, which would be its best monthly performance this century with continued gains.

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(Update with price movements after the open.)

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