China blue chips take a breather as economic stimulus-driven rally loses steam
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US-listed Chinese stocks including e-commerce giants such as Alibaba (NYSE:BABA) fell on Thursday, taking a break after experiencing double-digit spikes in their shares since the People’s Bank of China (PBOC) unveiled its largest stimulus package since the COVID-19 pandemic last week.
The bank announced measures on Sept. 24 to lower borrowing costs and inject more money into the Chinese economy, in addition to easing mortgage payment burdens for households. Also, the PBOC said it would cut the cash reserve requirements for banks by 50 basis points to free up 1T yuan ($142B) in new lending.
Meanwhile, the PBOC cut its benchmark seven-day reverse report rate by 0.2 percentage point to 1.5, among other interest rates.
Shares of Alibaba (BABA) were last down 1.5% in Thursday midday trade. They had popped 7.9% on Sept. 24 after the unveiling of the stimulus package, and added another 18.6% up to their last close on Wednesday. E-commerce rivals JD.com (JD) and Pinduoduo-parent PDD (PDD) were down 0.5% and 0.4%, respectively. Their US-listed shares had soared 50.5% and 49.3%, respectively, from Sept. 23 close to Wednesday.
Meanwhile, Chinese video game publisher company NetEase (NTES) slipped 1.1%, halting a nearly 30% climb from Sept. 23 close to Wednesday. Search giant Baidu (BIDU) was lower by 4.2%, after having gained 30.4%.
EV makers Li Auto (LI) and Xpeng (XPEV) shed 3.3% and 6.5%, respectively, in Thursday afternoon trade. The former had advanced 34.7% from Sept. 23 close to Wednesday, while the latter had added 39.5%.
Looking at the Asian nation’s benchmark stock indexes, the Shanghai index (SHCOMP) is closed from Oct. 1 to Oct. 7 due to China National Day. From Sept. 23 close to Sept. 30 close, the gauge swelled 18.6%. The Hang Seng index (HSI) was last down 1.9% in Thursday afternoon trade, after a 15.2% jump.
Here are some China-focused exchange-traded funds of interest: (NYSEARCA:FXI), (KWEB), (CQQQ), (MCHI), (ASHR), (YINN), (TDF), (CHIQ), (GXC), (EWH), (KBA), (YANG), (CXSE), (CAF), (CWEB), (PGJ), (KURE).