Alibaba, JD.com Jump as China Pledges Stimulus to Rescue Economy

(Bloomberg) — U.S.-listed Chinese stocks rose sharply across the board in premarket trading on Friday, after Beijing’s top leadership pledged more stimulus to rescue an economy hampered by extended Covid lockdowns in major cities.

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E-commerce giant JD.com Inc. was among the top gainers in the group, rising as much as 17%. Peers Alibaba Group Holding Ltd. and Pinduoduo Inc. both rallied 13%. The bounce in American depositary receipts came after a 10% advance in the Hang Seng Tech Index, its best one-day performance since Beijing vowed to stabilize financial markets on March 16.

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The Chinese Communist Party’s Politburo pledged to deliver on economic targets and support healthy growth of internet platform companies, according to a statement following a quarterly economic meeting chaired by President Xi Jinping. Officials vowed to speed up implementation of supportive measures, including tax cuts and fee reductions, while sticking to the Covid Zero policy.

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“The market is excited by the current headlines, but to see this rally sustain we need to move from talking the talk to walking the walk,” said Sharif Farha, a portfolio manager at Safehouse Capital, in emailed comments. “Investors are looking for an excuse to buy China tech, so it’s up to the Chinese policy makers to give them one.”

Vital Knowledge founder Adam Crisafulli said in a note that the language in the Chinese government’s most recent pledge “sounded very similar” to the last one in March. “But Beijing never followed through in the interim period with much action.” More significant to markets are Covid outbreaks in major Chinese cities, he said, with these showing some signs of stabilizing in the capital and Shanghai.

Speculation that authorities could ease a yearlong regulatory crackdown on tech firms during an upcoming meeting also helped boost risk sentiment. Meanwhile, Bloomberg reported that Beijing is discussing with American regulators the logistics of allowing on-site audit inspections of U.S.-listed Chinese firms, in an effort to keep majority of these stocks on American stock exchanges.