Fear of Global Economy Slowdown Sends Stocks in the Red
Shares in Chinese ADSs across various industries slid in early trading Thursday as economic uncertainty persisted after a bad year for stock markets.
The stocks of Chinese ADSs, among which were tech giants Alibaba, Baidu, and JD.com, were in the red across the board Thursday morning, fueled by market uncertainty and fears of a global economic slowdown.
Chinese e-commerce rivals Alibaba Group Holdings Ltd. (NYSE: BABA) and JD.com Inc. (Nasdaq: JD) slid near 4 percent each in the first hours of trading today to $131.89 and $20.31 per American depositary share, respectively.
Baidu Inc. (Nasdaq: BIDU) saw its shares fall 5 percent to $154.24 apiece in early trading today. The head of the search engine company, Robin Li, wrote in a message to his employees yesterday that "winter is coming" in China's economy. Despite the warning, Baidu's revenue guidance for 2018 was in line with analysts' estimates and shares in the company ended higher on Wednesday.
Shares in the tech and gaming giant NetEase Inc. (Nasdaq: NTES) took a $7 plunge in the morning, trading at $222.52 per share. Video streaming platform Bilibili Inc. (Nasdaq: BILI) saw its stock drop 4 percent to $13.73 per ADS.
Other industries also took a hit, with pharmaceutical company Beigene Ltd. (Nasdaq: BGNE) down 12 percent, at $120.17 per ADS, and China Pharma Holdings Inc. (NYSE American: CPHI) down 10 percent, at 22 cents per share.
Financial stocks dropped with China Rapid Finance Ltd. (NYSE: XRF) leading with a 9 percent slide, at $1.07 per share. Fanhua Inc. (Nasdaq: FANH) was down 2 percent, at $22.22, while shares in Yirendai Ltd. (NYSE: YRD) declined 10 cents to $10.61 per share.
Shares in the education provider Bright Scholar Education Holdings Ltd. (NYSE: BEDU) was trading at $10.97, down 7 percent before noon. The company, which operates international and bilingual K-12 schools in China, announced today that it plans to release its financial results for the three months through November on Jan. 17.
This week, Wall Street ended its worst year since 2008. The financial crisis was exacerbated through the year by tariff jitters, rising interest rates, and fears of diminishing corporate profits.
On Monday, renewed hopes for a resolution to the U.S.-China trade dispute provided a glimmer of optimism for investors. However, as the week advanced, uncertainty persisted amid a slowing economy across the globe, with China paving the way.