Chinese tech stocks Alibaba, Tencent, and Futu Holdings plunged due to central bank inaction and caution

From Nasdaq: 2025-03-20 15:55:20

Chinese tech and consumer stocks like Alibaba, Tencent, and Futu Holdings experienced significant declines, with shares falling 4.3%, 5.6%, and 5.2%, respectively. This drop is attributed to disappointment over China’s central bank’s inaction and a cautious note from a Wall Street analyst after a strong year-to-date rally.

China’s central bank decided to hold rates, leading investors to take profits following a substantial rally in Chinese stocks. Stimulus measures have been a driving force behind the rally, but concerns about the economy’s state, potential U.S. tariffs, and currency devaluation are factors affecting investor sentiment.

Despite the recent rally, Chinese stocks like Alibaba, Tencent, and Futu Holdings have seen impressive year-to-date gains. However, analysts at Bank of America warn of a potential correction, drawing parallels to a previous rally in 2015 that eventually collapsed. Uncertainty around policy and tariffs adds to investor caution.

China’s central bank’s decision to hold rates may be influenced by signs of economic improvement, including better retail sales and industrial output. However, continued growth hinges on policy decisions and stimulus effectiveness. With ongoing uncertainty, investors are cautious and taking profits after a strong market run.



Read more at Nasdaq: Why Chinese Tech Stocks Alibaba, Tencent, and Futu Holdings Plunged Today