Alibaba and JD.com saw their stocks take a hit in Hong Kong trading on Tuesday, following the release of China's latest trade data. The data revealed a mixed picture for the world's second-largest economy.
Chinese exports experienced a sixth consecutive monthly decline in October, dropping by 6.4% compared to the previous year. Economists surveyed by FactSet had predicted a decline of 3.7%. However, there was some positive news as imports unexpectedly rose by 3%, surpassing estimates of a 3.5% fall.
The surprising increase in imports suggests stronger-than-expected Chinese consumption, which bodes well for e-commerce giants like Alibaba (BABA) and JD.com (JD). Despite this, both stocks, along with other tech names including Baidu (BIDU), closed lower.
Alibaba stock fell by 2%, while JD.com saw a 2.2% decrease as Hong Kong's Hang Seng Index closed 1.7% down. The companies' American depositary receipts (ADRs) also experienced a decline in early premarket trading.
CMC Markets analyst Michael Hewson highlighted that the rise in imports may signify a return in domestic demand. However, he cautioned that the slump in exports is more concerning, indicating weak global demand that is unlikely to recover soon.
In other news, the International Monetary Fund (IMF) revised its forecast for China's growth, citing the country's recent economic performance and measures taken to support its struggling property market. The IMF now predicts China's gross domestic product to grow by 5.4% in 2023, up from its previous forecast of 5%. Additionally, it expects growth of 4.6% in 2024, compared to the earlier forecast of 4.2%.
Unfortunately, these positive growth projections were insufficient to boost Chinese stocks on Tuesday.
