China Stock Roundup: Alibaba Misses, Yingli Green, Disappoint

Markets showed a downward trend over the week following fresh concerns about China's economy. The benchmark index declined on Monday following the release of discouraging trade data.

The Shanghai Composite Index closed nearly flat on Tuesday as the impact of a report in a leading Communist Party publication continued to weigh on investor sentiment. The benchmark index increased on Wednesday with consumer and healthcare stocks leading the gainers. The Shanghai Composite Index declined marginally on Thursday with consumer staples and industrials leading the declining stocks.

Alibaba Group Holding Ltd. (BABA - Analyst Report) reported fourth-quarter fiscal 2016 (ended Mar 31, 2016) earnings of 20 cents per share, missing the Zacks Consensus Estimate of 38 cents. Yingli Green Energy Holding Company Ltd. (YGESnapshot Report), or Yingli Solar, reported an operating loss of 72 cents per American Depositary Share (“ADS”) in fourth-quarter 2015, narrower than the Zacks Consensus Estimate of a loss of $2.60.

Last Week’s Developments

Last Friday, the Shanghai Composite Index lost 2.8% following a decline in commodity stocks and fears that the recent uptick in economic data may be petering out. A decline in commodity stocks sent producers of commodity stocks tumbling, which led to losses for the day and the benchmark ending the stocks nearly flat. The Hang Seng China Enterprises index declined for the fifth successive day, marking its longest losing stretch for the year.

The H-share index lost 1.8% while the benchmark index closed below the 3,000 mark. The Hang Seng declined 1.7% leading to a weekly loss of 4.5%, the highest since Feb 12. All of the CSI 300’s 10 industry groups suffered losses, with consumer staples stocks falling significantly. A gauge of developers on the Shanghai exchange declined 2.1% after gaining for three successive days. The small-cap heavy ChiNext index slumped by 4.3%.  

Markets and the Economy This Week

The benchmark index declined again on Monday following the release of discouraging trade data. Additionally, a leading publication issued a warning about the country’s debt situation. The Shanghai Composite declined by 2.8% once again while an index of raw materials stocks fell to its lowest in two months.

Data released over the weekend revealed that China’s exports suffered a 1.8% decline in April in dollar terms. Additionally, imports fell for the 18th successive month, by 10.9%. Meanwhile, an important Communist Party publication said that the country needs to prioritize dealing with its debt situation over the pursuit of short term growth targets.

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