Chinese stocks such as Alibaba Group Holdings Ltd. (NYSE:BABA) and Li Auto Inc. (NASDAQ:LI) witnessed a pre-market slump, a reaction to a notable fall in the Shanghai Composite Index.

What Happened: The Shanghai Composite Index plunged by up to 0.6%, slipping below the crucial support level of 2,800. As per Bloomberg, this downturn was spearheaded by banks, including the Agricultural Bank of China Ltd. and Industrial & Commercial Bank of China Ltd., which each retreated by at least 4%.

See Also: Tesla’s Chinese Rival Zeekr Takes On Elon Musk’s EV Giant With A More Affordable Electric SUV In China Than Model Y

Francis Chan, an analyst at Bloomberg Intelligence, suggested that the selloff could be a result of disappointment over first-half results, with five out of six state banks reporting profit declines. He also noted that some investors might be cashing in after the sector outperformed the broad market this year.

Read Next:

• Tesla’s China Woes Just Got Worse: XPeng’s Model 3 Killer Receives Over 30K Orders In 48 Hours Of Launch

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

Image via Shutterstock