BABA Stock News: Alibaba Group falls after US imposes new export bans on semiconductors

• NYSE: BABA fell by 2.5% during Monday’s trading session. 
• The US imposes new export bans on semiconductors to China.
• Chinese ADR stocks were on the decline following the news as well as new covid lockdowns.

Alibaba Group (BABA) dropped lower to start the week as new export bans from the US and a fresh round of covid lockdowns were hitting Chinese ADR stocks. On Monday, shares of BABA fell by 2.5% and closed the trading session at a price of $79.24. Stocks pulled back and extended their declines on Monday as all three major averages closed in the red once again. Weakness in semiconductor names led to the NASDAQ index closing at its lowest price in two years. Overall, the Dow Jones lost 0.3%, while the S&P 500 and the NASDAQ fell by 0.8% and 1%, respectively, during the session. 

Alibaba stock price

The major news that hit Alibaba’s stock on Monday was that the United States imposed new export restrictions on certain semiconductor chips to China. The purpose of the new restrictions is to slow China’s technological and military advancement, and as a result tech stocks like BABA were sent reeling. Analysts believe the immediate impact would affect Chinese chip makers and not companies like Nvidia (NVDA) or Advanced Micro Devices (AMD). Still semiconductor stocks also fell as several US-based companies have an existing business with China.

Another factor weighing on Chinese ADR stocks was a resurgence of Covid-19 cases in various regions of China. The spike in cases comes after a week-long national holiday, and several areas including Shanghai imposed some new lockdown restrictions on Monday. Other stocks like JD.Com (JD), PinDuoDuo (PDD), and Nio (NIO) were all on the decline to start the week. 

BABA 5-minute chart 10/10/22