Why Is Alibaba Stock Trading Lower Monday?

Alibaba Group Holding Limited BABA stock is sliding Monday in line with the broader indexes IShares China Large-Cap ETF FXI and KraneShares Trust KraneShares CSI China Internet ETF KWEB.

Hong Kong stocks have plunged to a 15-month low, adding to a three-week decline as investors expressed disappointment over China’s economic recovery and unchanged key lending rates. 

The Hang Seng Index dropped 2.3% to a level last seen in October 2022, and the Hang Seng Tech Index sank 3%, reaching its lowest since April 2020. 

Mainland Chinese markets experienced even sharper declines, with the Shanghai Composite Index falling 2.7% and the Shenzhen Composite Index plunging 4.5%, SCMP reports.

Prominent Chinese tech companies like Tencent Holding Ltd TCEHY, Meituan MPNGF MPNGY, and Baidu Inc BIDU led steep declines in stock values. 

Also Read: Alibaba and Other Major Hong Kong Stocks Suffer Losses, Marking Worst Year Start Since 2016

The real estate sector also faced significant losses, with China Resources Land and Longfor seeing double-digit percentage drops. The electric vehicle sector, including BYD Co, Ltd BYDDF BYDDY and Li Auto Inc LI, and financial firms like AIA and HSBC Holdings, Plc HSBC also experienced decreases.

Despite the People’s Bank of China (PBOC) maintaining its one-year loan prime rate at 3.45% and the five-year rate at 4.2%, investor confidence remains low due to the lack of substantial stimulus measures and the ongoing “three red lines” policy. 

The Hang Seng Index has lost over 12% this year, marking the worst start since 2016. The market’s losses have erased gains from lifting the zero-Covid policy in November 2022, with the index falling 52% from its peak in January 2023. 

This market downturn reflects broader investor uncertainty and Beijing’s lack of robust policy responses.

On a separate note, Alibaba co-founder Jack Ma expressed solidarity with the spirit of rural teachers in China. Ma, 59, a former teacher, hailed their passion and conviction for the future.

A Jack Ma Foundation video captured the increasingly reclusive Chinese billionaire speaking to a group of rural Chinese teachers, expressing his admiration for their efforts despite challenging conditions in the countryside, SCMP reports.

Ma, who has maintained a low profile since stepping down as chairman of e-commerce giant Alibaba in 2019, has met with Chinese rural teachers for nine years in the run-up to the Chinese Lunar New Year.

Lately, Ma has advocated for agricultural and educational development and environmental protection. Ma has pursued several educational causes after departing from the company.

Despite giving up the executive Chair position at Alibaba in 2019, Ma remained an influential and pivotal figure.

Alibaba lost its position as the most valuable company in China to PDD Holdings Inc PDD last year as the former struggled with its management and organizational restructuring as China went softer on its domestic regulatory crackdown on the influential companies. 

Alibaba stock lost 42% in market value last year. PDD gained 51% in stock value last year.

Price Action: BABA shares are trading lower by 2.74% at $67.52 premarket on the last check Monday.

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

Photo via Wikimedia Commons