Despite China’s ongoing economic woes, mainland firms traded in the US rallied in response to Alibaba Group Holding Ltd.’s (NYSE:BABA) better-than-expected revenue. This may provide a boost to Chinese tech stocks. JD.com Inc. (NASDAQ:JD) and Pinduoduo Inc. (NASDAQ:PDD) increased by more than 3.2%, while Baidu Inc. rose by 2.5%. Alibaba shares traded in the United States gained for a fourth consecutive day, trimming previous gains to finish 1.8% higher. The Nasdaq Golden Dragon Index increased by 2.3%, its most significant one-day increase in about a month.
Henry Guo, an analyst at M Science LLC, stated, The company mentioned a business rebound in June, which could support other e-commerce players like JD.com (NASDAQ:JD) and Pinduoduo (NASDAQ:PDD). Before this publication, investors had low expectations for China’s ADRs, but reports from Alibaba indicate that these businesses are likely to outperform investor forecasts.
For more than a year, Chinese tech equities have endured turbulence due to regulatory crackdowns, a series of harsh lockdowns that depressed demand, and most recently, escalating geopolitical tensions. While some experts have been enthusiastic about earnings results and others have maintained their positive views on the nation’s stocks, traders have been unloading them, with the Nasdaq Golden Dragon China Index down almost 18% this year after a fall of 11 % in July. Nevertheless, the benchmark has risen by 41% since its low point in March.
Now, Alibaba’s sale could be a positive indication for investors, despite the stock’s other challenges, such as a weakening Chinese economy and regulatory concerns from Beijing and Washington officials. Included in. Last week, the company’s equities were added to the US Securities and Exchange Commission’s list of those at risk of being delisted from US exchanges. This comes only days after Alibaba’s announcement that it would seek an initial public offering in Hong Kong.
Analyst
Marvin Chen stated This is a promising start to the earnings season for China’s technology sector. Investors will seek reassurance that the worst is over and an explanation of what this implies for technology from an economic and regulatory standpoint.
Other Chinese IT heavyweights such as Baidu, JD.com(NASDAQ:JD), and Pinduoduo (NASDAQ:PDD) are slated to disclose their quarterly results later this month, so all eyes will be on them. Baidu (NASDAQ:BIDU) shares are down almost 6 % this year, while JD.com and Pinduoduo are down 7.3% and 12.1%, respectively.
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