The Direxion Daily FTSE China Bull 3X Shares (YINN) ETF plunged 12.42% in the pre-market session on Sunday, as concerns over slowing Chinese factory activity and escalating trade tensions weighed on the outlook for China's export-driven economy.

According to the Caixin/S&P Global manufacturing PMI survey released on Monday, China's factory output growth slowed in January to a 4-month low of 50.1, missing analyst estimates. The survey cited rising global trade uncertainties and US tariff threats as key factors impacting new export orders for Chinese manufacturers.

With the Direxion Daily FTSE China Bull 3X Shares providing leveraged exposure to Chinese equities, the fund was highly sensitive to negative sentiment around China's economic prospects. Worries that a potential trade war could further dampen China's exports and manufacturing sector seem to have triggered a sharp sell-off in the bullish China ETF.