As US stocks suffered sharp declines overnight, Chinese concept stocks listed in the US bucked the trend and posted gains.
On November 5th Beijing time, all three major US stock indices closed lower, with the Dow plunging 3.44%, marking its largest single-day drop in 18 months. The S&P 500 tumbled 4.36%, and the Nasdaq plummeted 5.52%, both representing rare declines in a short period.
However, some Chinese concept stocks listed in the US showed strong performance, clearly decoupling from the broader US market decline. The Nasdaq Golden Dragon China Index, which tracks core Chinese concept stocks, rose 0.43% overnight. Representative Chinese companies such as Alibaba (NYSE: BABA), NetEase (NASDAQ: NTES), and PDD Holdings Inc (NASDAQ: PDD) saw notable gains, which may reflect the unique appeal of Chinese companies' distinctive "tech narrative."
Multiple Sub-Sectors Drive Chinese Concept Stocks Higher
Specifically, several sub-sectors within Chinese concept stocks rose overnight, including after-school tutoring, consumer, internet, technology, and new energy vehicle industries.
Among them, Kebiao Technology surged 30.9%, leading Chinese concept stocks. Huhu Technology International rose 27.24%.
In the consumer sector, retail stock MINISO gained 5.95% on the day, while NetEase (NASDAQ: NTES), spanning both consumer and technology, rose 4.37%.
Additionally, Bilibili, Alibaba (NYSE: BABA), and PDD Holdings Inc (NASDAQ: PDD) all rose more than 2.6%.
In the new energy vehicle sector, Li Auto also gained 2.94%.
Chinese Concept Stocks Significantly Outperform US Stocks
This clearly created a gap with the performance of some important US technology companies.
On the same day, Tesla fell 10.77%, Nvidia dropped 9.26%, Microsoft and Facebook both declined more than 3%, Amazon and Google dropped more than 2%, and Apple fell 1.53%.
Looking at the overnight US stock market, the Nasdaq Golden Dragon China Index outperformed the Nasdaq by nearly 5 percentage points.
Tracing the Underlying Reasons
Industry analysts suggest that the divergence between US stocks and Chinese concept stocks on that day may be related to different underlying logics.
Chinese concept stocks are supported by continuous and stable policy expectations. From the 14th Five-Year Plan to the start of the 15th Five-Year Plan, technological self-reliance and self-strengthening as a development主线 have been consistently maintained, with the institutional environment continuously optimized, providing a long-term predictable development framework for market innovation entities. The 15th Five-Year Plan outline deploys accelerated high-level technological self-reliance and self-strengthening, leading the development of new quality productive forces, which has stabilized overseas capital's long-term confidence in China's innovative industries.
Meanwhile, US stocks may be affected by the Republican Party's "historic defeat" in the midterm elections, with market concerns about policy continuity, consistency, and stability.