Baidu Inc (ADR) (NASDAQ:BIDU) slid over 4% amid China’s factory production posting the worst start to a year since 2009.
The share price fall has been accentuated following fears of escalating crisis in Ukraine.
China’s slower growth
China’s factory-production posted the worst start to a year since 2009. Its factory-production grew 8.6% in January and February, while China’s retail sales increased at the slowest pace since 2004.
Baidu Inc (NASDAQ:BIDU)’s fall also led to Chinese stocks trading in New York to a five-week low.
China’s retail sales – a key measure of consumer spending – too posted less-than-analysts’ expectations. The retail sales increased 11.8% from the year-ago period, according to the National Bureau of Statistics. Moreover, China’s fixed-asset investment, a measure of government spending on infrastructure, expanded 17.9%.
The threat of a slowdown in the world’s second-largest economy was echoed in stock performance. The Bloomberg China-US Equity Index of the most-traded stocks in the U.S. fell 2.7% to 96.49, extending a five-day slump to 8.2%.
Toxic cocktail of market uncertainty
The largest Chinese exchange-traded fund in the U.S – the iShares China Large-Cap ETF- dropped 2.5% to an eight-month low of $32.98, while the Standard & Poor’s 500 Index retreated 1.2%.
According to Alastair McCaig, analyst at IG: “Today has the a distinct whiff of a ‘risk-off’ day as traders clear the decks ahead of Crimea voting this weekend”. David Bulk, market strategist at Panmure Gordon, said there is a ‘toxic cocktail’ of market uncertainty at the moment.
US Secretary of State John Kerry is in London for key talks on Ukraine with his Russian counterpart Sergei Lavrov, as a disputed referendum in Crimea looms on Sunday.
John Kerry told a Senate panel in Washington that the U.S. and Europe will take ‘very serious’ steps the day after the vote ‘if there is no sign’ of a resolution to the crisis in Ukraine.
However, the Shanghai Composite Index jumped 1.1%, the most in three weeks, to 2,019.11, following speculation the securities regulator will permit listed companies to sell preferred shares for the first time.