Chinese internet stocks plummeted on Thursday, with the KraneShares CSI China Internet ETF (KWEB) plunging 5.45% as investors reacted with disappointment to the details of China's long-awaited fiscal stimulus package aimed at stabilizing the country's slowing economy.

The Chinese government unveiled plans to raise the ceiling on local government debt by 6 trillion yuan ($840 billion) to replace existing hidden debts. Additionally, local governments will be able to tap another 4 trillion yuan in a new local bond quota over the next five years. However, the stimulus package fell well short of investor expectations, with some analysts projecting a more substantial stimulus of up to 14 trillion renminbi ($1.96 trillion).

The relatively modest size of the announced measures, coupled with lingering concerns over the ongoing trade tensions with the United States, led investors to sell off shares in Chinese internet companies, which are particularly sensitive to the country's economic outlook. Companies in the internet and technology sectors, which make up a significant portion of KWEB's holdings, are seen as vulnerable to a slowdown in consumer spending and business investment.