Global index providers MSCI Inc and FTSE Russell said they would cut three Chinese telecom companies from their benchmarks in response to a U.S. investment ban, crushing the share prices and widening the fallout from the U.S. sanctions.

The deletions add to the suite of firms already cut from indexes because of the U.S. ban and it likely requires passive investors, such as index tracking funds, to sell the stocks: China Mobile, China Telecom and China Unicom Hong Kong.

All three firms have large numbers of passive investors and their shares fell heavily, wiping out nearly $10 billion in value by the midday break in Hong Kong, in the clearest illustration yet of the investment fallout from the U.S. rules.

In separate statements dated Jan. 7, MSCI said it would remove the companies from its China indexes on Jan. 8 and FTSE Russell said they would be cut from its Global Equity Index series and China A indexes on Jan. 11.

“If you’re a passive index provider, of course, you need to get out of the way,” said Kay Van Petersen, global macro strategist at Saxo Capital Markets in Singapore.

“And obviously if you’re active and you know the index providers are going to have to get out of the way, you’re not going to just be sitting around while something is getting sold off.”

The file erasures are because of a November request from President Donald Trump, which prohibits Americans from putting resources into Chinese organizations that the U.S. considers to have joins with China’s military, starting from November 2021.

China has censured the move as wanton mistreatment of its organizations and a few of the influenced firms have denied military ties.

The most recent erasures followed the New York Stock Exchange affirming it would delist U.S.- exchanged American Depositary Receipts of the three telecoms on Jan. 11.

That came after the U.S. Depository explained that the speculation boycott reaches out to auxiliaries with comparative names to 35 organizations on a Defense Department rundown of Chinese firms it says have military connections.

Asset administrators state the market effect may just be shortlived on the grounds that non-U.S. purchasers will supplant the latent surges.

Chipmaker SMIC, for instance, is among a few to draw in revenue and is up over 35% in about fourteen days regardless of being covered by the restriction and eliminated from lists.

However, the potential for the ambit of the guidelines to extend has kept a few speculators apprehensive – especially following reports by Reuters and the Wall Street Journal that the boycott could be extended to incorporate tech monsters Alibaba and Tencent.

China Mobile offers drooped 6% to an over 14-year low by the mid-day break in Hong Kong, China Telecom shares slid 8% to a 12-year low and China Unicom shares likewise fell 8% to a 10-month low. The more extensive Hang Seng list rose 1.3%.

($1 = 7.7529 Hong Kong dollars)

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