Nasdaq Slump Fuels First China ADR Decline in Three WeeksAlexandria Baca
Chinese stocks traded in New York posted the first weekly decline in three after the Nasdaq Composite Index sank the most since February.
The Bloomberg index of the most-traded Chinese stocks in the U.S. dropped 0.8 percent to 98.42 April 4, erasing gains of as much as 1.9 percent for the week. The measure fell 0.3 percent in the last five days. E-Commerce China Dangdang Inc., the country’s biggest online bookseller, tumbled 7.6 percent. Sohu.com Inc, owner of China’s third-largest search engine, retreated for a fifth week.
The Nasdaq sank 2.6 percent April 4 in New York as a selloff worsened for some of the bull-market’s best-performing stocks, triggering a global rout. The measure reached a 14-year high on March 5. China outlined last week a package of measures including railway spending and tax relief as well as job creations to shore up the economy.
“The mini-stimulus that the government rolled out I think was a small positive, but they need to do a little bit more to show they’re going to support growth at close to 7.5 percent,” Brian Jacobsen, who helps oversee $241 billion as chief portfolio strategist at Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin, said by phone on April 4.
The People’s Bank of China, at its first-quarter monetary policy committee meeting, reiterated it will “keep moderate liquidity” according to an April 3 statement on its website.
China’s government will sell 150 billion yuan ($24 billion) of bonds this year to help build railways mainly in the less-developed central and western regions, the State Council said in a statement. The State Council also said the nation will extend a preferential tax policy to more small companies and increase financing to build low-income housing.
A gauge of Chinese companies listed in Hong Kong entered a bear market on March 20 amid concern the country won’t reach its 7.5 percent economic growth target for 2014.
Dangdang fell 7.6 percent last week to $12.85. Sohu also declined 7.6 percent to $59.94, its lowest price since August.
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., slid 0.6 percent to $35.63 in its first decline in three weeks. The Hang Seng China Enterprises Index climbed 1.1 percent in Hong Kong last week to 10,110.01. The Shanghai Composite Index added 0.8 percent to 2,058.83.