Please ensure Javascript is enabled for purposes of website accessibility

Why JD.com Stock Tumbled Today

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors are getting cold feet about China-based stocks.

What happened

Shares of JD.com (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. 

JD.com'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 JD.com's share price drop today is part of that larger trend. 

Now what 

In addition to investors' concerns about Chinese stocks, some JD.com 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 JD.com'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 JD.com. The Motley Fool recommends New Oriental Education & Technology Group. The Motley Fool has a disclosure policy.

Stocks Mentioned

JD.com Stock Quote
JD.com
JD
$58.64 (5.00%) $2.79

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.