In a recent development, major Chinese stocks including Alibaba Group Holdings , NIO Inc. ( NIO ) , and Li Auto ( LI ) have seen a decline in premarket trading on Tuesday.

What Happened: In Tuesday’s premarket, Alibaba’s shares were trading 1.78% lower, while its rival JD.Com Inc. ( JD ) was trading 2.30% lower.

EV makers Li Auto ( LI ) and NIO Inc. ( NIO ) experienced a drop of 2.05% and 0.74% respectively. Baidu Inc. ( BIDU ) , which is slated to announce its second-quarter earnings on Thursday, was trading 1.22% lower.

The downward trend in these stocks is a result of Chinese exchanges discontinuing the daily release of data related to foreign fund flows. This data served as a significant sentiment indicator for investors. The cessation, which started on Monday, has caused a surge in investor anxiety, thereby negatively impacting the performance of Chinese stocks.

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Even before this development, the year-to-date net flows were already negative, suggesting a retreat from China stocks. If this trend continues, it could lead to the first year of net outflows since 2016.

Why It Matters: The decision by China to halt the publication of real-time data comes at a time when the country is grappling with economic challenges. These include a struggling property sector and weak consumer sentiment. Recent economic data from the country showed an unexpected decrease in fixed-asset investment in the first half of the year.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari