Chinese ADSs Plunge After Trump Threatens End to Truce

About 70 percent of the Chinese ADSs ended in the negative on Monday after the U.S. President threatened to impose tariffs this week, ending a four-month truce between the two largest economies.

Anna Vodopyanova
    May 06, 2019 6:05 PM  PT
Chinese ADSs Plunge After Trump Threatens End to Truce
author: Anna Vodopyanova   

Investor worries sent China stocks in the red Monday on Wall Street, ending the lucky streak that began four months ago with a truce in the tariff war between Washington and Beijing.

Trump tweeted on Sunday that the United States would raise tariffs on $200 billion worth of Chinese goods this week, causing investors to seek safety and flee from risky assets. On Monday, Trump sharply criticized China.

While a number of U.S. stocks dipped early in the day and recovered in the afternoon as the initial shock from the threats appeared to wear off, the vast majority, about 70 percent, of the Chinese ADSs monitored by CapitalWatch ended on the negative side.

The biggest loser was Ruhnn Holding Ltd. (Nasdaq: RUHN), which sank nearly 9 percent on the day to $6.18 per ADSs. A month ago, when Ruhnn, a KOL company, lifted off in its its initial public offering, its shares were worth double that amount.

Another newly listed company, Yunji Inc. (Nasdaq: YJ), which had a successful liftoff in New York Friday, was down nearly 6 percent, at $13.37 per share.

New energy companies Daqo New Energy Corp. (NYSE: DQ) and JinkoSolar Holding Co. Ltd. (NYSE: JKS) shed 7 and 8 percent on the day, respectively, to close at $35.67 and $19.25 per ADS.

Semiconductor Manufacturing International Corp. (NYSE: SMI), a top semiconductor foundry based in Shanghai, saw a 6 percent decline to $5.38 per share.

Chinese giants did not escape the same fate. Alibaba Group Holding Ltd. (NYSE: BABA) ended $6.97 lower, at $188.24 per share. Its e-commerce rival, Ltd. (Nasdaq: JD), dipped more than 4 percent, to $28.70.

Companies in other industries, including FinTech, hospitality, and education, likewise witnessed a general decline across the board.

Among the gainers were biopharma companies Zai Lab Ltd. (Nasdaq: ZLAB) and China Biologic Products Holdings Inc. (Nasdaq: CBPO), which inclined 6 and 2 percent, respectively, to $27.83 and $96.68 per ADS. China SXT Pharmaceuticals Inc. (Nasdaq: SXTC) and China Jo-Jo Drugstores Inc. (Nasdaq: CJJD) also gained 2 percent each, ending at $4.95 and $1.27 per share, respectively. China Pharma Holdings Inc. (NYSE American: CPHI) was up nearly 6 percent, at 35 cents a share.

The S&P 500 closed down 0.4% after falling as much as 1.6% during the session. The Dow Jones Industrial Average fell 66.47 points, or 0.25%, to 26,438.48, the S&P 500 lost 13.17 points, or 0.45%, to 2,932.47 and the Nasdaq Composite dropped 40.71 points, or 0.5%, to 8,123.29.

(Reuters contributed to this article)