Alibaba Stocks Dips amid Cloud Unit Spin-Off, US Export Curbs

Alibaba’s stock tumbled as it shifted its cloud business spin-off due to US semiconductor export restrictions affecting artificial intelligence (AI) applications in China.

On Friday, Alibaba Group closed trading in the US lowered by 9.14% to $79.11 while dropping by 9.83% to HKS73.35 in Hong Kong’s session.

In over a year, Alibaba’s most significant one-day stock plunge rubbed around $20 million from the Chinese tech giant’s market value. According to an expert, Alibaba’s cancellation of a complete spin-off on its cloud units impacts negatively.

Citing chip supply uncertainties for AI development, the firm expressed concerns following the US’s expanded chip export ban, now covering AI-related materials. Alibaba’s action underscores a shared predicament for Chinese companies, grappling with advancing AI without access to US technology, notably Nvidia.

Meanwhile, Alibaba became Asia’s most robust stock value, worth $830 billion at its peak in October 2020. However, the e-commerce company took center-stage in China’s tech sector crackdown as Beijing’s economy slowed.

Amid the national tech stock decline, the Shanghai Composite increased by 0.11% to CN¥3,054.37. In contrast, China’s Shanghai Shenzhen CSI 300 index fell by 0.12 to CN¥3,568.07 in the closed session.

The e-commerce shift and US export curbs led most Asian stocks to decline, returning their recent gains for the week.

Japan’s Nikkei Rises amid US Curb Affects Alibaba

While Chinese tech weakness affected Asian stocks, Japan’s Nikkei surged, defying the trend influenced by the US chip curb hitting Alibaba.

On Friday, Japan’s Nikkei 225 climbed by 0.46% to ¥33,585.20 in the close trading session. Bank of Japan (BOJ) Governor Kazuo Ueda emphasized the necessity of ultra-loose policies amid Tokyo’s economic contraction.

Furthermore, South Korea’s Kospi fell by 0.74 to ₩2,469.85, and Australia’s ASX 200 sank by 0.13% to AU$7,049.40. While India’s Nifty 50 dipped by 0.17% to ₹19,731.80.

Despite economic concerns, the Nikkei is poised for a 2.7% gain this week, marking its third consecutive week in positive territory. Investors remained optimistic about Japanese stocks due to the potential for a dovish BOJ stance.

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