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China, Hong Kong stock markets dive as President Xi secures third term

Market's reporter Jared Blikre breaks down the downturn seen in Chinese and Hong Kong markets after President Xi Jinping secured his third term.

Video Transcript

JARED BLIKRE: Hey there. Well, let's take a look at those Chinese stocks that we were taking a look at, or at least talking about, a few seconds ago. This is the NASDAQ Golden Dragon China Index. And let me tell you something, this had-- this was the worst day it has ever had. And you can see, here's the candlestick chart over the last two days. Let me brief this up with a line chart. There, you can see the carnage. Now, here is a max chart. And you can see-- well, let me put this on a six-month basis. Maybe we can get that. And you can see at the lowest levels in six months. But as I said before, worst day ever, going back over 21 years for the Golden Dragon Index.

And here is some of the carnage that we're seeing inside that. Alibaba is sinking below its $68 IPO price. You can see 62.52. Let's get a max chart of Alibaba there. You can see basically at the lowest levels. Not quite just yet, but almost at the lowest levels. Some of those suffered in 2015, 2016. Another issue, Pinduoduo, that is down 25%. This stock has been hammered many times over the last couple of years.

And the overall implications for this, the question on traders' minds, is this about China? Is this some idiosyncratic event? Or is this yet another one of the, I guess, canaries in the coal mine with respect to the global situation and the problem that risk markets have had? So we're going to have to see if this morphs into anything bigger. We didn't even get into the Chinese yuan, which is at the worst levels, the weakest levels, versus the US dollar-- that is the offshore Chinese yuan-- we have ever seen.