Vaccine Scandal Brings China’s Drugs Stocks Back Down to Earth

A vaccine scandal is taking the shine off China’s drugmakers, the only industry to gain this year in the nation’s stock market.

A gauge of drugmakers plunged as much as 5.7 percent on Monday, the biggest loss since February 2016, as anger mounted over the safety of vaccination drugs after a Shenzhen-listed company was found to have faked data and sold low-quality products for use in infants. While the government has vowed to investigate, the incident is likely to fuel distrust about locally-made products as well as undermine China’s efforts to boost overseas sales.

The scandal began this month when ...