Markets declined over the week, weighed down by curbs on investors and regulatory actions to curb the insurance sector. The benchmark index declined by the most since June on Monday. The Shanghai Composite Index rebounded on Tuesday after encouraging retail sales and factory output data boosted investor sentiment. The benchmark index closed at its lowest level in a month on Wednesday, The Shanghai Composite Index declined again on Thursday, falling to a new one month low.

Yingli Green Energy Holding Company Ltd. (YGE - Free Report) , also known as Yingli Solar, reported adjusted net loss of $2.18 per American Depositary Share (“ADS”) in third-quarter 2016, wider than the Zacks Consensus Estimate of a loss of $1.30. LightInTheBox Holding Co., Ltd. (LITB - Free Report) reported third-quarter 2016 loss of 3 cents per share, in line with the Zacks Consensus Estimate.

Last Week’s Developments

Last Friday, the Shanghai Composite increased 0.5% after inflation data came in above expectations, indicating that the economy was stabilizing. The CSI 300 gained 0.3%. However, the benchmark index ended a winning stretch of eight consecutive weeks of gains after authorities cautioned that certain takeover deals were “barbaric” in nature. The benchmark index lost 0.3% over last week while the CSI 300 declined 1%, also snapping an eight week long winning streak. 

Large caps led indices higher over the day after China’s November PPI increased at the sharpest pace in five years. A hike in prices of building materials, coal and steel led this increase. CPI also rose faster than expected, increasing 2.3% year-over-year. This was the fastest pace recorded since April, primarily due to rising food prices.

Meanwhile, the Shenzhen index declined 0.7% during the first week of the Shenzhen Hong Kong exchange link. The Hang Seng lost 0.4% while the Hang Seng China Enterprises Index moved 0.3% lower.

Markets and the Economy This Week

The benchmark index declined by the most since June on Monday, losing 2.5%. Fears regarding the possible policies of a Trump administration and concerns about new regulatory restrictions on insurers were primarily responsible for these losses. Investors in Hong Kong also seemed rattled, particularly by indications that the Federal Reserve was likely to raise rates this week. The CSI 300 declined by 2.4%.

Market watchers opined that the market had taken losses because prominent insurers were being prevented from purchasing stocks. Additionally, U.S. President-elect Donald Trump has recently questioned the existing “one China” policy of the U.S. by separately acknowledging Taiwan. This was another reason for the decline in Hong Kong shares. The Hang Seng lost 1.4% while the Hang Seng China Enterprises Index declined 1.7%.

The Shanghai Composite Index rebounded on Tuesday, increasing 0.1% after encouraging retail sales and factory output data boosted investor sentiment. Bargain hunting ensued as markets recovered from the earlier day’s losses. The CSI 300 declined by 0.1%. Stocks had suffered losses earlier during the day as Monday’s selloff continued.

However, the release of positive economic data led to a change in direction for stocks.  Retail sales data for November was the strongest recorded for the year. Meanwhile, a jump in steel production boosted factory output. However, private investment declined with the reliance on state expenditure increasing.

The Shenzhen benchmark index increased by 0.3%. Consumer and energy shares led gains for stocks while infrastructure and bank stocks suffered losses. The Hang Seng advanced by 0.1% while the Hang Seng China Enterprises Index increased by 0.2%.   

The benchmark index closed at its lowest level in a month on Wednesday, losing 0.5%, after authorities promised to curb risky investments by insurers. This led to a further decline in investor’s appetite for risk even as the Fed prepared to raise rates after its two day meeting. The CSI 300 declined by 0.8%. Losses for the day were led by infrastructure and real estate stocks. Only banks and energy companies ended the day with gains. The Hang Seng ended the day flat while the Hang Seng China Enterprises Index declined 0.1%.

The Shanghai Composite Index declined by 0.7% on Thursday, falling to a new one month low. Stocks suffered losses after the Fed raised rates and signaled that rates will be increased at a quicker pace next year when the economy is strong enough to sustain such increases. The CSI 300 slumped by 1.1%.

Banking shares suffered losses following a bond sell off which raised concerns about a liquidity crunch. These losses offset gains made by small cap shares. Stocks in Hong Kong fell to their lowest in four months. The Hang Seng declined by 1.8% while the Hang Seng China Enterprises Index moved 2.3% lower.

Stocks in the News

Yingli Green Energy Holding Company Ltd., also known as Yingli Solar, reported adjusted net loss of $2.18 per American Depositary Share (“ADS”) in third-quarter 2016, wider than the Zacks Consensus Estimate of a loss of $1.30. Moreover, reported loss was wider than the year-ago quarter loss of $2.77 per ADS.

Total revenue was $218.9 million, down 37.7% year over year. Revenues also missed the Zacks Consensus Estimate of $240 million by 8.8%. Total PV module shipments were 365.3 megawatts (“MW”) in the third quarter of 2016, compared with 460.4 MW in third-quarter 2015.

For the fourth quarter, Zacks Rank #5 (Strong Sell) rated Yingli Green expects PV module shipments in the range of 600–670 MW. The company has revised its 2016 shipments guidance of 2.1 GW to 2.2 GW for the full year. The stock has lost 32.4% year to date, less than the Zacks categorized Solar Industry which has declined by 57.1% (Read: Yingli Green (YGE - Free Report) Reports Wider-than-Expected Loss in Q3)

China Petroleum and Chemical Corporation (SNP - Free Report) , also known as Sinopec, is mulling over initial public offering (IPO) of its retail operations. It is to be noted that the IPO might help the integrated company garner as much as $10 billion. Sinopec is in discussion with banks for organizing a possible Hong Kong listing by next year.

The retail unit of the company comprises over 30,500 fuel stations along with a network of convenience stores. Investors should note that the IPO of the retail business primarily reflects the effort by China to reform its struggling state-owned enterprises.

Sinopec has failed to surpass the Zacks categorized Emerging Market Integrated industry year to date. During the aforesaid period, the company gained more than 22%, while the broader industry improved as much as 66%. (Read: Sinopec (SNP -Free Report) Likely to Initiate Retail Unit IPO Next Year)

Alibaba Group Holding Limited (BABA - Free Report) has entered into an agreement with the Thai government per which it will assist in the development of the E-commerce industry. Specifically, it will help train SMEs and individuals, and explore ways to enhance the country’s logistics capabilities. Alibaba’s services are one of the ways the government seeks to support the Thailand 4.0 and Digital Economy initiatives. The stock has gained 12.2% year to date, outperforming the Zacks categorized Electronic Commerce industry. (Read: Technology Stock Roundup: Microsoft Has Big Week)

In a separate development, Alibaba disclosed that it has entered into a partnership with China’s largest wireless operator China Mobile Ltd. (CHL). Together, the companies plan to develop Internet-related services by working together on vital aspects such as information infrastructure, cloud computing and smart devices. The stock has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

LightInTheBox Holding Co., Ltd. reported third-quarter 2016 loss of 3 cents per share, in line with the Zacks Consensus Estimate. Earnings declined compared to earnings of 3 cents per share reported in the year-ago quarter. The stock has a Zacks Rank #2 (Buy).

Revenues decreased 8.6% year over year to $64.4 million but were higher than management’s guided range of $61 million to $63 million. Revenues also surpassed the Zacks Consensus Estimate of $63 million.

The global online retailer’s revenue from the apparel category declined 19% on a yearly basis and now contributes 36.7% of total net revenues. Revenues from other general merchandise also declined 0.7% on a yearly basis. The stock has lost 12.8% year to date, underperforming the Zacks categorized Internet Services delivery industry which has lost 6.7% over the same period.

Performance of Most Actively Traded US-listed Chinese Stocks

The table given below shows the price movements of 10 Chinese companies with the highest three-month average trading volume on U.S. exchanges. Price movements over the last five days and during the last six months have been included.

Next Week’s Outlook

Curbs on insurance companies have acted as a major headwind for markets this week. This has had a ripple effect on other sector, leading to broad based losses. The Fed’s decision to hike rates and related comments has also served to dampen investor sentiment. However, economic data has been mostly positive in nature. Upcoming reports will provide data on FDI and housing prices. If these are also encouraging in nature, markets could soon return to their winning ways in the days ahead.