Alibaba, other tech stocks drop as Goldman downgrades China growth forecast

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China stocks had a rough ride on Monday, as Goldman Sachs piled on worries over growth and investors fretted the country won't move fast enough with stimulus.

Some of China’s biggest tech names fell on Monday, weighed by concerns the government may not provide enough stimulus with Goldman Sachs becoming the latest Wall Street bank to cut its growth forecasts for the world’s second-largest economy.

The losses came amid concerns China officials aren’t working fast enough to stimulate the economy. Investors were focused on a disappointing cabinet meeting on Friday, which was notable for its lack of “concrete stimulus” said Goldman Sachs analysts. Citing a second straight month of weak data in May, the Goldman analysts on Sunday cut their 2023 full-year real GDP growth forecast to 5.4% from 6% and their 2024 growth forecast to 4.5% from 4.6%.

Goldman joins a group of Wall Street banks ratcheting down their China forecasts recently, with UBS last week trimming its 2023 growth expectations to 5.2% from 5.7%, citing weak May data and signals that June may be no better. JPMorgan last week cuts its own China outlook to growth of 5.5% from 5.9%, due to a “loss of recovery momentum in domestic activity and growing concerns of deflation.”

 

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