Foreign investors have sold a record net 17.9 billion yuan ($2.5 billion) of mainland China shares through trading links with Hong Kong on Monday, with the year-to-date investment level turning into a small net outflow.
If the trend continues through the end of the year, it would be the first annual fall since the stock connect program started in 2014, reported Bloomberg.
What Happened: Shares of US-listed Chinese companies took a hit with Alibaba Group Holding Ltd. BABA closing over 12% lower on Monday and Tencent Holdings TCEHY ending the session down over 14%.
Pinduoduo Inc.‘s PDD stock plunged over 24% while shares of JD.Com Inc. JD closed over 13% lower.
Shares of Chinese EV-makers, too, took a hit with Nio Inc. NIO closing over 15% down and Xpeng Inc.‘s XPEV stock losing over 11%.
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The plunge in the stock market followed Chinese President Xi Jinping’s consolidation of power as expectations regarding the continuation of key policies like Covid Zero intensified.
Xi, who has won a historic third five-year term, has named his key allies to the Politburo standing committee — China’s most powerful political body. The report said that investors will now be keenly watching for two economic gatherings scheduled later this year — the Politburo meeting and the Central Economic Work Conference.
GDP: The benchmark CSI 300 Index fell 2.9% on Monday despite China registering better-than-expected third-quarter gross domestic product data. On Tuesday morning, the index was trading marginally higher.
China’s GDP expanded by 3.9% in July-September compared to a year earlier.
“As the COVID situation remains highly unpredictable, we are keeping our 2022 GDP forecast at 3.0%, despite the upside risk. Local health authorities have maintained their zero-COVID approach after the Party Congress. The number of medium-and high-risk areas has surged in recent weeks. The consumption outlook remains somber,” ANZ Research said in a note.
Image and article originally from www.benzinga.com. Read the original article here.