U.S.-listed stocks of Chinese technology companies witnessed a surge on Thursday, with investors focusing on signs of support from Beijing while shrugging off disappointing economic data.
- Alibaba’s American depositary receipts (ADRs) saw a 1.4% increase in premarket trading.
- JD.com’s ADRs experienced a rise of 2.9%.
- Alibaba’s Hong Kong shares closed over 3% higher, while JD.com’s surged by 6.4%.
- Meituan, listed on the Hong Kong Stock Exchange as 3690.HK, recorded a notable 5.8% increase.
Support from Premier Li Qiang
Easing Concerns over Tech Crackdown
Despite further declines in Chinese exports in June, indicating weak global demand, the signs of a potential easing of Beijing’s crackdown on the tech sector outweighed the negative economic data.
Official figures revealed that China’s exports fell more than anticipated in June, experiencing a 12.8% decline compared to the previous year. This downturn was greater than the 7.5% decline witnessed in May and exceeded economists’ expectations of a 9.2% decrease according to The Wall Street Journal.
However, China’s trade surplus for June was $70.62 billion, higher than May’s $65.81 billion but slightly lower than the projected $74.0 billion.
Concerns Surrounding China’s Economy
Market analyst Craig Erlam of OANDA highlighted the ongoing trend of China’s struggling economy, expressing worries that the conditions are not improving and that targeted stimulus measures may be necessary to prevent missing the country’s modest 5% growth target.
Chinese officials have recently been transparent about the country’s worse-than-expected recovery from the Covid-19 pandemic, as the specter of deflation looms.