US-listed Chinese stocks traded lower on Monday, tracking declines in Hong Kong equities as thin holiday trading and weak China economic data weighed on investor sentiment.
Alibaba Group Holding Limited (NYSE:BABA) stock fell after Hong Kong markets slipped into the final trading days of the year. Other major Chinese technology stocks also moved lower, including JD.com, Inc. (NASDAQ:JD) and PDD Holdings Inc. (NASDAQ:PDD).
The declines mirrored weakness in Hong Kong, where the Hang Seng Index closed down 0.7% at 25,635.23, while the Hang Seng Tech Index fell 0.3%.
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Hong Kong Pullback Sets the Tone
Hong Kong stocks retreated as trading activity slowed and fresh data pointed to mounting pressure on China’s industrial sector. According to the SCMP, sentiment weakened after a government report showed profits at Chinese industrial companies fell at a faster pace in November.
Hopes for policy support from Beijing and a year-end “Santa Claus rally” faded as the session progressed. Total turnover in Hong Kong reached 224.5 billion Hong Kong dollars, about 10% below the annual average, highlighting cautious positioning ahead of the New Year holiday.
China’s National Bureau of Statistics said industrial profits dropped 13.1% in November, worsening from a 5.5% decline in October. Over the weekend, the Ministry of Finance said it plans to ramp up fiscal spending next year to support consumption and public investment.
Cautious End to a Strong Year
“As the holiday draws nearer, trading would be light and Hong Kong stocks are expected to remain rangebound,” Yang Chao, an analyst at China Galaxy Securities, told the SCMP.
Despite Monday’s pullback, Alibaba shares are up nearly 74% year to date, driven by momentum in its cloud computing business and artificial intelligence initiatives.
Price Action: Alibaba shares were down 3.00% at $147.66 at the time of publication on Monday, according to Benzinga Pro data. JD.com fell 1.17%, while PDD Holdings declined 1.52%.
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