Shares of NIO Inc. (NIO) dropped significantly on Tuesday, mirroring a broader decline in U.S.-listed Chinese stocks. This downturn follows news that Chinese officials did not meet investor expectations for substantial economic stimulus measures, leading to a sell-off in the Chinese market.
Baidu Inc. (BIDU) shares tumbled over 6% on Tuesday, mirroring a broader selloff in U.S.-listed Chinese stocks after China’s planning officials failed to meet investor expectations for aggressive economic stimulus. The lack of a substantial fiscal boost fueled concerns about a potential slowdown in China’s economy, weighing heavily on Baidu and other tech companies reliant on the country’s growth.
Chinese markets experienced a sharp selloff overnight, with the Hang Seng Index in Hong Kong plummeting more than 9% due to disappointment over the lack of aggressive fiscal stimulus announcements from Beijing. Investors had hoped for bold measures to support the economy, but the only concrete plans announced were a front-loaded 100 billion yuan ($14.1 billion) budget from 2025 and another 100 billion yuan for construction projects. The selloff extended to offshore Chinese equities and U.S.-listed Chinese stocks.
The Hang Seng Index experienced a significant 0.5 percent increase, reaching a five-month high of 17,290.08 as of 10.05 am local time. The Hang Seng Tech Index also saw a modest gain of 0.2 percent, while the Shanghai Composite Index witnessed a slight decline of 0.1 percent. This surge in the Hang Seng Index reflects a positive sentiment among investors, with global funds reducing their underweight positions in China and increasing their exposure to the market. The return of mainland investors through the stock connect program further contributed to the upward momentum, as they purchased approximately HK$1.2 billion worth of Hong Kong stocks.
The Hang Seng Index opened with a 1.1% increase to 17,018.98 as of 9.51am local time, while the Hang Seng Tech Index gained 1.8%. Ping An Insurance experienced a 1.5% surge to HK$33.50 due to exceeding estimates in new-business values during the first quarter. Hong Kong Exchanges and Clearings rose 1.2% to HK$233.40 ahead of its earnings report later on Wednesday.
