Alibaba, Nio, JD.Com And Other US-Listed China Stocks Tumble As Investors Await Clarity On Fiscal Stimulus Plan

China’s stock market faced a significant decline on Tuesday, even as broader Asia-Pacific markets experienced gains. This downturn occurred in the wake of record highs on Wall Street, where the Dow Jones Industrial Average and the S&P 500 reached new peaks.

What Happened: Several Chinese companies saw notable declines. Nio Inc – ADR (NYSE:NIO) fell by 4.58%, Alibaba Group Holding Ltd – ADR (NYSE:BABA) decreased by 4.47%, JD.Com Inc (NASDAQ:JD) experienced a 6.28% drop, and Li Auto Inc. (NASDAQ:LI) was down by 4.62%. This comes as investors step back to see when and where the Chinese stimulus will be directed at the world’s second-biggest economy.

The CSI 300 index in mainland China dropped 2.66%, closing at 3,855.99. Meanwhile, Hong Kong’s Hang Seng index fell by 3.67%, ending at 20,318.79. These declines followed China’s release of disappointing September trade data, with exports rising by 2.4% and imports by 0.3%, both figures falling short of expectations.

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Additionally, revised trade data from South Korea confirmed a trade surplus of $6.7 billion in September, consistent with preliminary figures and up from $3.7 billion in August.

Why It Matters: The downturn in Chinese stocks comes amid concerns over the effectiveness of China’s economic stimulus measures. Recently, China has been considering issuing 6 trillion yuan, approximately $850 billion, in special treasury bonds over the next three years to stimulate the economy and address local government debt pressures. However, the hype surrounding these measures has waned, leading to a lack of confidence in the market.

U.S.-listed Chinese stocks have also been trading lower due to the underwhelming impact of the stimulus. E-commerce stocks have seen losses of 6% to over 8% in the last five days, while Chinese electric vehicle stocks like Nio Inc and XPeng Inc have also declined. The market’s reaction reflects skepticism about the potential for these measures to drive substantial economic growth.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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