BABA stock price was reading at $63.34 as of October 24, 09:30 AM EDT
Leading Chinese internet firms like Alibaba (NYSE:BABA), JD.com (NASDAQ:JD), and Baidu (NASDAQ:BIDU) saw their shares plummet Monday over concerns that the country’s private sector may face increased restrictions as a result of Chinese President Xi Jinping’s hold on power.
The Chinese Communist Party [CCP] elected Xi to a third term as party leader over the weekend. Xi also appointed a number of CCP supporters to the party’s politburo standing committee. Wall Street saw the actions as a way to increase Xi’s power and a likely way to give the CCP more control and supervision over China’s business sector, especially the IT sector.
BABA stock and other Chinese movements
Investors were worried that Beijing might pass new rules that would slow the growth of tech companies and thwart any oppositional efforts. As a result, Baidu (NASDAQ:BIDU) sank close to 13%, JD.com (JD) fell about 15%, and Alibaba (NYSE:BABA) dropped more than 11% in pre-market trading as a result of the instant reaction on Wall Street.
Weibo (WB) dropped 10%, Pinduoduo (NASDAQ:PDD) dropped more than 16%, gaming platform operator NetEase (NASDAQ:NTES) was down 11%, and Bilibili (BILI) dropped 17% as the day started. Another victim was the KraneShares CSI China Internet ETF (KWEB), which dropped by about 13%.
For some weeks, the situation among Chinese tech stocks has been unpredictable. The situation got worse when the U.S. put new restrictions on the sale of certain semiconductor technologies in China. This was done to stop the Chinese military from getting their hands on these goods. Monday’s losses only made matters worse. Even though companies like Alibaba (NYSE:BABA) may not be directly involved in the semiconductor industry, many of them use American chip technology to power and maintain their online marketplaces for shopping, gambling, and Internet search. Because Beijing keeps a close eye on some of its biggest tech companies and often has ownership stakes in them, this size could cause U.S. officials to worry.
Baba Stock Rises As It Attracts Investor Interest: Explained
Featured Image – Megapixl © Alexraths
Author Jowi Kwasu