Why Alibaba, Li Auto, Baidu And Other Chinese Stocks Are Falling In Pre-Market

The Shanghai Composite Index plunged by up to 0.6%, slipping below the crucial support level of 2,800., leading to the drop in the US listed stocks of certain Chinese companies.

Chinese stocks such as Alibaba Group Holdings Ltd. BABA and Li Auto Inc. LI witnessed a pre-market slump, a reaction to a notable fall in the Shanghai Composite Index.

What Happened: The Shanghai Composite Index plunged by up to 0.6%, slipping below the crucial support level of 2,800. As per Bloomberg, this downturn was spearheaded by banks, including the Agricultural Bank of China Ltd. and Industrial & Commercial Bank of China Ltd., which each retreated by at least 4%.

Subsequently, Chinese firms listed in the U.S. experienced a pre-market dip on Tuesday, as per Benzinga Pro data. Alibaba saw a 1.75% dip, while its rivals JD.com Inc. JD registered a 1.37% decline and Temu-parent PDD Holdings PDD dropped by 1.60%.

Chinese internet giant Baidu Inc. BIDU was also down by 1.44%. Chinese EV maker Li Auto Inc.LI showed one of the highest declines at 3.44% while other EV makers like XPeng Inc. XPEV and NIO Inc. NIO remained largely unaffected.

See Also: Tesla’s Chinese Rival Zeekr Takes On Elon Musk’s EV Giant With A More Affordable Electric SUV In China Than Model Y

Francis Chan, an analyst at Bloomberg Intelligence, suggested that the selloff could be a result of disappointment over first-half results, with five out of six state banks reporting profit declines. He also noted that some investors might be cashing in after the sector outperformed the broad market this year.

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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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