The S&P Dow Jones Indices and FTSE Russell on late Wednesday decided to remove more Chinese companies from their indices after an updated U.S. executive order barred domestic investment in firms with alleged ties to China's military, Reuters reports.

The U.S. index publisher identified 25 Chinese companies that would be deleted from its index on August 2, while FTSE Russell said it will remove an additional 20 firms on July 28.

The decision is based on the feedback from index users and stakeholders, FTSE Russell said.

The move, based on an order signed by President Joe Biden on June 3 that expanded the scope of the ban, could deepen trouble for U.S.-listed Chinese firms already dealing with Beijing's sweeping efforts to rein in its tech sector and enforce tighter data security efforts.

U.S. capital markets have been a lucrative source of funding for Chinese firms in the past decade, especially for technology companies looking to benchmark their valuations against listed peers there and tap into a big liquidity pool.

China, however, has cracked down in the past week on several firms looking to list in the United States with cybersecurity investigations.

Ride hailing giant Didi Global Inc became a prominent target, just days after its US$4.4 billion listing on the New York Stock Exchange.

Shares of Didi were down for the fourth consecutive day in U.S. premarket trading, after China ordered the app to be removed from mobile app stores.

Stocks to be removed from the FTSE Russell and the S&P Dow Jones Indices include aerospace-related companies such as Aerospace CH UAV, Avic Aviation High-Technology and Avic Heavy Machinery.

FTSE also listed China Shipbuilding Industry, CSSC Offshore & Marine Engineering (Group), Inner Mongolia First Machinery Group.

S&P Dow Jones Indices listed Zhonghang Electronic Measuring Instruments Co Ltd and North Navigation Control Technology Co Ltd, among others.

The stocks will be removed from FTSE GEIS, the FTSE Global China A Inclusion indices and associated indices.

FTSE Russell has previously removed Chinese companies including Semiconductor Manufacturing International Corp and Hangzhou Hikvision Digital Technology Co from its indexes due to U.S. sanctions.

The S&P had removed some Chinese stocks, including Luokung Technology Corp from its index, under a previous executive order. It said the companies are now eligible to be taken back under Biden's new order.

- Reporting by Samuel Shen in Shanghai, Tom Westbrook in Singapore and Sanjana Shivdas in Bengaluru.

S&P Dow Jones Indices and FTSE Russell dump dozens of Chinese companies