Chinese stocks rose on Wednesday to their best day since 2008 as government officials signaled that their regulatory measures could end soon.
X
Alibaba (WOMAN), JD.com (DD), Baidu (BIDU) and other Chinese stocks rebounded from multi-year lows. Shares have been falling repeatedly for over a year, mainly due to regulations, concerns about Covid-19 and macroeconomic issues.
China’s financial officials have said regulatory action against tech companies could end soon. They also plan to support the listing of overseas shares and ensure stability in the capital markets “as soon as possible,” state media said.
Alibaba shares rose 25.2% to 96.20 during stock market trading this afternoon. Shares of JD.com soared 32% to 60.70, while Baidu jumped 26% to 136.35.
Other Chinese stocks on the move
Besides, Pingduoduo (PDD) rose 43% to 39.05, NetEase (NTES) jumped 20.5% to 89.50 and Tencent Holdings (TCEHY) rose 25.8% to 49.60.
Shares of Chinese biotech companies Zai Lab (ZLAB), BeiGene (BGNE) and hatchmed (HCM) also took off in the news. The three were among five stocks listed by the Securities and Exchange Commission as non-compliant with audit rules. They were given until March 2024 to resolve the issue or face delisting.
In the afternoon, Zai Lab stock soared 28.1% to 37.20, outpacing BeiGene’s 25.6% and Hutchmed’s 20.4%.
The positive comments from government officials came a day after Chinese stocks fell to a 21-month low. The massive collapse in Chinese stockpiles also followed reports that Russia had turned to China for military assistance in the war with Ukraine. Traders fear that China’s aid to Russia could trigger a global backlash against Chinese firms, including sanctions. Pressure was also exerted by threats of delisting Chinese companies on US exchanges.
Index registers biggest gain
However, on Wednesday, the Hang Seng Tech Index, which has fallen nearly 70% from its February 2021 peak, recorded its biggest daily gain of 22%. The flagship Hang Seng index rose 9.1%, the biggest one-day percentage gain since the end of 2008.
Prior to Wednesday’s spike, Alibaba’s stock had lost 65% of its market value in the past 12 months. JD is down 47% and Baidu is down 58%.
With the current volatility, it’s time to read and follow IBD’s The Big Picture column.
If you’re new to IBD, consider taking a look at its stock trading system and the basics of CAN SLIM. Recognizing chart patterns is one of the keys to investment guidance. IBD offers a wide range of growth stock listings such as Leaderboard and SwingTrader.
Investors can also create watchlists, find companies close to the point of purchase or design their own screens in IBD MarketSmith.
Staff Writer Allison Gatlin contributed to this article.
Please follow Brian Deegon on Twitter at @IBD_BDeagon to learn more about technology stocks, analysis and financial markets.
YOU MAY ALSO LIKE:
The stock market holds big gains ahead of the Fed’s decision
The 5 Best Chinese Stocks to Buy and Watch
Chinese stocks plunge as earnings reports fail to ease regulators’ fears
Which stocks are breaking out or approaching a pivot point? Check MarketSmith
Unlock premium stock listings, investment tools and analysis