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Why Stock Tumbled Today

By Chris Neiger – Aug 19, 2021 at 3:27PM

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Investors are getting cold feet about China-based stocks.

What happened

Shares of (JD 5.00%), China's largest online retailer, were falling today on seemingly no company-specific news. Investors may be concerned about increased regulation in China for technology stocks, as well as other industries.'s share price had fallen 5% as of 3:03 p.m. EDT.

So what 

Investors of China-based companies have been on a wild ride over the past several weeks as the Chinese government has announced sweeping changes across several industries. Technology companies have faced the brunt of new regulations in the country recently. 

A white arrow pointing down on a red background.

Image source: Getty Images.

For example, the government recently forced China's largest ride-hailing company, DiDi Global, to remove its apps from Chinese app stores and restricted the company from signing up new customers. 

Additionally, many online private tutoring companies have been negatively impacted by new rules restricting how much time children can spend on online classes. As a result, China's largest online tutoring company, New Oriental Education & Technology Group, saw its share price plummet 74% last month

With so much uncertainty surrounding China-based investments right now, many investors are exiting their positions in Chinese stocks. It appears that's share price drop today is part of that larger trend. 

Now what 

In addition to investors' concerns about Chinese stocks, some investors are also taking into account the fact that China recently reported worse-than-expected retail sales growth. China's retail sales grew by only 8.5% in July, which was lower than the 11.5% growth analysts were expecting.  

Those retail figures, combined with the current volatility from China-based stocks, mean that's stock could experience more price swings in the near term. 

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends The Motley Fool recommends New Oriental Education & Technology Group. The Motley Fool has a disclosure policy.

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