Chinese technology stocks whipsaw whipsaw When Trump’s fuel decoupling anxiety
(Bloomberg) – Chinese stock traders were re-reminded about the financial and technological decoupling between the world’s two largest economies after Donald Trump restricted U.S. investment into Asian countries.
Most of them come from Bloomberg
Stocks are looking around in the morning trade as traders react to a series of headlines. The Hang Seng Tech index removed the earlier 4.4% loss, resulting in higher. Shares in Alibaba Group Holding Ltd. and JD.com Inc. also fell by less than 3%.
Trump’s call for new scrutiny of foreign companies listed in the United States has largely downplayed geopolitical risks this year. However, some investors see the decline as an opportunity to buy the bets that Chinese technology rally will continue to place. Trump’s team hopes to increase more restrictions on Chinese chipmakers and adds the guilt, while stocks in semiconductor maker International Corp. eliminate earlier losses, a report Tuesday said.
“I think today’s move seems to be a local positioning, not a fundamental shift in onshore sentiment – the market is still digesting the Trump memo,” said Billy Leung, senior investment strategist at Global X ETFS. He added that the memo “for companies,” he added. The direct impact of fundamentals remains limited.”
China’s large Internet archipelago has been crying this year, winning investors’ favor after DeepSeek gave them confidence in the industry’s growth potential. However, market volatility on Tuesday reminds people that sentiment can quickly change after the cohort’s sharp valuation is reassessed.
China and Us
Tuesday’s Hong Kong trade and Monday’s U.S. sale reveal a widening gap between the valuations of stocks listed in the two markets. Alibaba’s ADR traded at a 7.6% discount with its Hong Kong listing on Monday, data compiled by Bloomberg. By comparison, the five-year average is about 0.1%.
When Trump targeted the common structure of Chinese companies listed on U.S. exchanges (called “mutable interest entities”), ADR suffered even greater losses.
Read: Trump has so far aimed at the biggest Salvo.
The memorandum also restores issues related to accounting practices of some foreign companies, saying the U.S. government will ensure that its rules are fully adhered to. Investors reminded investors in 2022 that our scrutiny of Chinese companies led to concerns about forced talk shows on U.S. exchanges. The two sides finally reached a compromise after U.S. officials received further access to audit documents on Chinese and Hong Kong companies.
