What's Going On With Alibaba And Other Chinese Stocks Wednesday

Chinese stocks, including Alibaba Group Holdings Ltd BABA, JD.com Inc JD, and PDD Holdings Inc PDD, are trading lower Wednesday following weaker export numbers for May in China.

Exports fell by 7.5% last month from a year earlier to $283.5 billion, dropping for the first time in three months, with export volumes falling below their levels at the start of the year, SCMP reports. 

The offshore yuan weakened against the U.S. dollar following the release of May's trade data.

The weak exports confirm that China needs to rely on domestic demand as the global economy slows, Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, told SCMP.

Economists expect exports to decline further before bottoming out later this year.

Separately, budget shopping app PDD's short interest has returned to unprecedented levels since mid-March, courtesy of intensifying e-commerce price wars and weaker economic growth. 

PDD is leading ahead of its larger peers, JD.com and Alibaba, doling out new discounts to gain market share, Bloomberg reports.

Pessimism loomed in China's markets after the reopening rally fizzled, with post-Covid economy concerns.

Investors worry that PDD's aggressive campaign of boosting discounts to lure buyers is now a sector-wide phenomenon and is becoming more damaging to bottom-line growth. 

Also, Alibaba's plans to accelerate expansion offshore via Southeast Asia online platforms Lazada and AliExpress prompted PDD to spend more to retain its customers.

In June, Bloomberg Intelligence analysts expect PDD to cede some profit to competitors in the upcoming 618 shopping festival.

JD and Alibaba are both in solid positions, given the former's logistics support and the latter's growth strategy, according to Ian Chun, portfolio manager at Vontobel Asset Management. 

Price Actions: PDD shares traded lower by 0.66% at $72.33 in the premarket on the last check Wednesday. BABA shares traded lower by 0.95% at $85.88. JD shares traded lower by 2.15% at $36.94.

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