(Bloomberg) -- Already reeling from last week’s ban on ZTE Corp., add the prospect of slowing smartphone sales to a growing list of reasons investors are fleeing China’s technology stocks.
The MSCI China technology index slipped 0.8 percent as of 3:23 p.m. local time, with Lenovo Group Ltd. losing 1.1 percent to its lowest level since 2009. Sunny Optical Technology Group Co. -- Asia’s top stock as recently as last month -- sank 6.7 percent. ZTE shares have been suspended from trading since the U.S. government imposed a seven-year ban on its purchases of crucial American components.
“Investors are worried about companies that are doing lots of businesses in the U.S.,” said Bocom International Holdings Co. analyst Chris Yim. “So far Lenovo is not affected by the U.S.-China tensions. It is not facing bans like ZTE, but the market is just worried.”
Bears are targeting Lenovo in particular amid doubts that a company once regarded as a potential challenger to Apple Inc. may not be able to revive itself. Short interest has surged as a rout in the shares deepened: the stock has fallen more than 70 percent in the past three years, erasing $13 billion of value. Lenovo said in an email that it doesn’t comment on its share price or speculation.
Chinese hardware makers are also being squeezed by concern over global smartphone demand following a weaker-than-expected outlook by Taiwan Semiconductor Manufacturing Co., Apple Inc.’s main supplier. Luxshare Precision Industry Co. and Han’s Laser Technology Industry Group Co. plunged more than 6.8 percent in Shenzhen trading.
Apple has fallen for three sessions after analysts at Morgan Stanley cut their forecasts for iPhone shipments. Morgan Stanley lowered its projections for iPhone shipments by 1 million in the quarter ending in March and 6 million for the current quarter.
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