(Bloomberg) -- Exchange-traded funds with exposure to the Chinese Internet behemoths Alibaba Group Holding Ltd. and Baidu Inc. are falling after President Donald Trump praised tariffs on technology from China.
The $3.4 billion iShares MSCI China ETF, or MCHI, was down 1.5 percent Thursday and the $1.2 billion KraneShares CSI China Internet Fund, or KWEB, dropped 1.2 percent. Both funds saw trading spikes, with volume at about twice the 20-day average for this time of day.
Alibaba shares rallied as much as 4.9 percent early in the session as the company reported its fastest pace of growth in more than four years. But the stock took a turn at around 10:30 a.m. and sank 2.5 percent before clawing back some of the losses. The company’s peers also got hit, with Baidu down 1 percent and JD.com Inc. plunged as much as 3.7 percent.
“I think of BABA as best-of-breed in the China Internet space, so if that can’t do well people run for the exits in names like JD.com and NetEase Inc.,” said Christian Fromhertz, founder and chief executive officer of the trader education firm Tribeca Trade Group. “JD got smoked, and there was some put buying in that name about an hour ago.”
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