Chinese ADRs declined in overnight trading as traders digested China's move to encourage mutual funds and insurance companies to increase equity investments. Tencent Music fell 2.3%; XPeng fell 1.9%; JD.com and Alibaba fell 1.4%; Baidu fell 1.2%; PDD Holdings fell 0.8%; NIO fell 0.7%.

China is guiding local mutual funds and insurers to boost their investments into stocks in the government’s latest initiative to shore up its ailing equity market as it confronts the threat of higher tariffs.

Mutual funds should raise their holdings of onshore equities by at least 10% annually for the next three years, while large state-owned insurers will need to invest 30% of their new policy premiums from 2025, Wu Qing, chairman of the China Securities Regulatory Commission, said at a press conference on Thursday.

China’s benchmark CSI 300 Index climbed as much as 1.8% in early trading as the announcements were made, but finished the afternoon session just 0.6% higher. The Hong Kong stock turned negative.