Vipshop (VIPS) shares plunged 7.09% in pre-market trading on Monday, caught in a broader selloff of Chinese ADRs and ETFs as trade tensions between the United States and China intensified. The sharp decline comes as investors fear a widening trade war could push the global economy into a deep recession.
The selloff in Chinese stocks was triggered by Beijing's retaliatory measures against U.S. tariffs. China announced it would impose additional levies on U.S. imports, responding to the U.S. increasing tariffs on Chinese goods to over 50%. This tit-for-tat escalation has sent shockwaves through financial markets, with Chinese companies bearing the brunt of the impact.
While Vipshop was not specifically mentioned in recent reports, it appears to be following the trend of other major Chinese ADRs. Companies such as Alibaba, JD.com, and PDD Holdings saw declines of 10-11% in pre-market trading. The Direxion Daily FTSE China Bull 3X Shares (YINN), an ETF tracking Chinese stocks, plummeted by 24%, underscoring the severity of the market reaction. As trade war fears mount, investors are likely to remain cautious about Chinese stocks, potentially putting further pressure on companies like Vipshop in the near term.
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