U.S.-listed Chinese stocks, including Alibaba, JD.com, and Nio, plummeted following weak economic stimulus signals from China’s government. Market concerns over China’s recovery weigh on global markets.
Bollywoodfever: Shares of U.S.-listed Chinese companies tumbled on Tuesday after a disappointing start for the Shanghai markets following a week-long break. Investors expressed concerns over the lack of significant new stimulus measures from the Chinese government to fuel economic recovery.
American Depositary Receipts (ADRs) of major Chinese companies suffered substantial losses. Alibaba Group’s shares dropped by around 8% in premarket trading, while JD.com and PDD Holdings fell even further, with declines of 10.9% and 10.6%, respectively.
Although China’s stock markets, represented by the Shanghai Composite Index and the blue-chip CSI 300, surged to their highest levels in more than two years at the open, optimism quickly faded. The mid-day market retreat was sparked after Chinese economic planner chairman Zheng Shanjie failed to deliver any new, large-scale stimulus measures during a briefing. This left investors uncertain about the government’s ability to address property sector challenges and broader economic concerns.
“The briefing from the Chinese government this morning didn’t offer investors anything significant in terms of new stimulus measures,” said Christopher Peters, trading floor manager at Accendo Markets in London. “Investors are now questioning whether these measures are enough to resolve China’s property sector issues.”
The market downturn in China spilled over into global markets, particularly affecting China-exposed assets in Europe and the U.S. U.S.-listed shares of Chinese electric vehicle maker Nio sank by 10.6%, while gaming company Bilibili plummeted 15.7%. Search engine giant Baidu also saw its stock fall by 9.1%.
Even broader China-focused ETFs felt the pressure. The iShares MSCI China ETF dropped 12.9%, while the tech-heavy KraneShares CSI China Internet ETF slipped 12.1%.
Other industries with exposure to China were also hit. Copper producer Freeport-McMoRan fell 4.1%, and luxury firm Estee Lauder saw a 3.5% drop in its stock price.
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