Chinese stocks plunged Monday, including internet giants such as Alibaba (BABA), Baidu (BIDU) and JD.com (JD), despite positive comments from government officials last week.
The positive comments from Chinese officials, who indicated that regulatory action would ease, led to double-digit share growth at Alibaba, Baidu and JD.com. Other stocks that rose on the news included pinduo duo (PDD), bilibili (BILI) and Tencent Holdings (TCEHY).
Chinese officials also said they planned to support foreign exchange listings and build stability in capital markets.
That provided the best growth in these stocks since 2008, but then the rally stalled.
Dive into Chinese stocks
And when the cheers were over, stocks started plummeting again Monday. Alibaba shares fell 4.4%%, closing at 103.59 in the stock market today. Shares of JD.com fell 5.7% to 61.44, while Baidu lost 1.6% to 146.68.
In addition, Pinduoduo fell 6.1% to 39.99, Bilibili fell 9.6% to 24.91 and Tencent Holdings was not yet officially closed, but fell 7.1% to 48.01.
The past year has been difficult for holders of Chinese stocks. Many of the major internet stocks have seen their market value halve in the past 12 months.
Shares have taken repeated beatings, largely due to regulation, Covid-19 fears and macroeconomic concerns.
Analysts pointed to three main drivers for the reversal. First, there are renewed concerns about possible cuts in Chinese stocks trading in New York.
Furthermore, a resurgence of Covid-19 cases is occurring in major cities on the mainland. Concerns also remain about the possibility of China supporting Russia in its invasion of Ukraine.
Follow Brian Deagon on Twitter at: @IBD_BDeagon for more information on technology stocks, analysis and financial markets.
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