By Clarence Leong

Shares of Naura Technology Group Co. fell sharply after the U.S. Commerce Department added its subsidiary to the so-called unverified list, while Chinese chip companies were sold off after the U.S. imposed new export restrictions targeting the sector.

Naura Technology's Shenzhen-listed stock fell by the 10% daily limit on Monday morning to 250.56 yuan ($35.21), extending its year-to-date losses to 28%.

Naura Technology's unit, Beijing Naura Magnetoelectric Technology Co., was among 31 Chinese entities added to the Commerce Department's unverified list on Friday. The unit contributed about 0.5% to the listed company's consolidated operating revenue in 2021 and its inclusion in the list won't materially affect the company's normal operations, it said in a Sunday filing.

Companies on the unverified list are one step away from being placed on the Commerce Department's blacklist, known as the entity list. The agency has made clear that if a foreign country doesn't cooperate in allaying its concerns, the companies can be moved to the entity list.

The overall chip sector in China came under pressure after the U.S. on Friday imposed new export restrictions on advanced semiconductors and chip-manufacturing equipment in an effort to prevent American technology from advancing Chinese military power.

Jefferies analysts led by Edison Lee described the latest move as a "massive step-up on U.S. export control of semi tech to China" in a research note.

The country's largest chip maker, Semiconductor Manufacturing International Corp., declined 3.1% in Hong Kong, while Advanced Micro-Fabrication Equipment Inc. slid 16% and GigaDevice Semiconductor Inc. lost 6.4%.

Meanwhile, Hong Kong-listed shares of Wuxi Biologics (Cayman) Inc. rose as much as 5.8% after a unit of the pharmaceutical company was removed from the unverified list. The removal followed a "successful completion of the on-site end-use check visit" by the Commerce Department in coordination with Chinese authorities, it said. The stock has since erased the gains and was recently 3.2% lower.

Write to Clarence Leong at

(END) Dow Jones Newswires

10-09-22 2350ET