24H | Some Chinese ADRs Drop on Worries About China’s Deflationary Pressure

Some Chinese ADRs dropped in overnight trading as China’s deflationary trend became more entrenched, deepening concerns about the nation’s growth prospects.

Alibaba and Bilibili fell 2%; NetEase and PDD Holdings fell 1%; Li Auto fell 0.9%; XPeng fell 0.6%; Baidu fell 0.5%; NIO fell 0.3%.

Producer prices on the mainland dropped by 3.6% from a year earlier in June, marking the 33rd straight month of declines and the steepest drop in more than two years, the National Bureau of Statistics said on Wednesday. Consumer prices unexpectedly rose by 0.1%.

Falling prices were believed by investors to be the biggest risk to China’s economy and the stock market, with the woes in the property market deterring homebuyers and industrial overcapacity hampering investments. Investors were waiting for more policy signals from a Politburo meeting later this month after top leaders pledged to address “involution”, a term coined to describe irrational competition in some industries plagued by excessive supply.

On the tariff front, US President Donald Trump said he would not delay the August 1 implementation of tariffs on 14 countries including Japan and South Korea, leaving US stocks in limbo in Tuesday trading.