The Direxion Daily FTSE China Bull 3X Shares (YINN), an exchange-traded fund (ETF) that provides leveraged exposure to Chinese equities, plunged around 5% in pre-market trading on Friday. The decline came as Chinese stocks and American Depositary Receipts (ADRs) retreated overnight, following modest rate cuts by Chinese banks aimed at supporting economic growth and stabilizing the housing market.

Chinese banks lowered their benchmark lending rates after the central bank eased policy in September. The one-year loan prime rate was cut to 3.10% from 3.35%, while the five-year LPR was reduced to 3.60% from 3.85%. However, these rate cuts were largely within market expectations and were not seen as a significant positive surprise.

Chunai Jean, a senior strategist at Daiwa Asset Management, commented, "It is not a big positive surprise, but rather within the expected range — we believe that the market's sense of relief will spread and provide support for stock prices." Jean added that they will continue monitoring fiscal spending measures expected to be implemented at the upcoming National People's Congress meeting.