Nokia Plans Major China Exit, Shares Fall Nearly 4%

Nokia shares fell nearly 4% on Tuesday following reports that it plans a significant withdrawal from mainland China, adding to broader weakness in tech stocks. The Nasdaq declined 1.5%, while the S&P 500 fell 0.54%.

China Retreat Adds Pressure

According to the South China Morning Post, citing sources familiar with the matter, the Finnish telecom equipment maker plans to cut most of its workforce in mainland China and phase out operational sites by year-end.

The move marks a major retreat after more than 40 years in China, as domestic competitors gain market share.

According to a Shanghai-based source, Nokia's mobile networks and network infrastructure business teams will face layoffs in batches. The total number of affected employees remains unclear.

Nokia did not immediately respond to requests for comment.

Tech Weakness Intensifies Selloff

Nokia's share decline was also influenced by broader pressures on tech stocks. The sector fell 2.5%, making it the worst performer among the S&P 500's 11 sectors.

However, eight sectors advanced, with an advance/decline ratio of 2.7. This suggests the selloff was concentrated in growth and tech stocks.

Technical Analysis

Nokia shares have risen 144.47% over the past 12 months. However, the medium-term trend has weakened.

The stock is trading 10.1% below its 50-day simple moving average of $11.55 and 12.5% below its 100-day simple moving average of $11.86.

Still, Nokia remains 10.5% above its 200-day simple moving average of $9.40. Its relative strength index stands at 49.89, indicating neutral momentum.

The $10 level is a key area to watch. If the stock breaks below this level on a sustained basis, it could refocus attention on the 200-day simple moving average.

Analyst Outlook

The stock carries a buy rating with an average price target of $18.00. Recent analyst actions include:

Morgan Stanley: Initiated with Overweight

JP Morgan: Overweight

Argus Research: Upgraded to Buy

Price Action

NOK price action: Nokia shares were down 3.66% at $10.38 at the time of publication on Tuesday.