February 3, 2014 (Chinavestor) Prominent Chinese stocks collapsed on the first trading day in February. Baidu Inc. (NASDAQ:BIDU) dove as much as $5.98, almost twice as much as Sohu.com Inc. (NASDAQ:SOHU). Top five Chinese decliners on the NYSE and NASDAQ included SouFun Holdings (NASDAQ:SFUN), NetEase Inc. (NASDAQ:NTES) and Ctrip.com International (NASDAQ:CTRP).
Shares of industry bellwether Baidu Inc. (NASDAQ:BIDU) fell hard on profit taking. BIDU is trading just 30 times earnings, not a rich valuation compared to Google Inc. (NASDAQ:GOOG) or Tencent (HKG:0700). But share prices of the company doubled in the March 2013-January 2014 period and thus pressure is on.
Conventional wisdom holds that when industry leaders falls hard, the rest follows. This was the case on Monday. Baidu Inc. (NASDAQ:BIDU) with a market capitalization of over $52 billion is the largest technology stock by far just as the chart on this page testifies. Remember, size of the bubble represent market cap.
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Besides BIDU, smaller internet play Sohu.com Inc. (NASDAQ:SOHU) declined $3.69. Volatility index for SouFun Holdings (NYSE:SFUN) has been on the rise lately, so today's big decline comes as no surprise.
CNOOC Ltd. (NYSE:CEO), China's offshore oil specialist, and WuXi Pharma (NYSE:WX) are the only non-technology stocks among top ten decliners of the day. But for a stock with prices of $150 and over, a $2.05 fell is insignificant.