China stocks jumped Thursday as the nation’s government officials curtailed many of its zero-Covid controls that stalled the world’s second-largest economy. Alibaba (BABA) stock, as well as shares of JD.com (JD) and Baidu (BIDU) were among those climbing.
The loosening of the Covid controls also come as China has faced unprecedented nationwide protests. Alibaba stock jumped 6.6%, closing at 94.17 on the stock market today. JD.com stock rose 3.3% to 60.37, while Baidu surged 5% to 120.33.
The rally also included Bilibili (BILI), up 7.7% to 23.40. Pinduoduo (PDD) rose 6.2% to 91.11 and Tencent Holdings (TCEHY) moved up 4.3% to 40.88.
In a recent note to clients, Morgan Stanley upgraded its view on China stocks for the first time in two years.
“We are at the beginning of a multi-quarter recovery in earnings revisions and valuations,” the note said.
Alibaba Stock Hit By Multiple Events
Alibaba and other China stocks in the technology sector have been under heavy pressure since around the first quarter of 2021. In addition to Covid-related restrictions, other threats to their business included burdensome regulations, supply-chain woes, higher logistics costs, currency depreciation, inflation and a weakening economy.
The new Covid guidelines arrive as trade data announced on Wednesday showed Chinese exports in November fell at their steepest pace in more than two years.
Since hitting an all-time high in October 2020, Alibaba stock has plunged 69%. JD is off 43% from its December 2020 record high. Pinduoduo is off 54% from its high, while Baidu is down 58% and Bilibili has dropped 82%.
Alibaba, JD and Pinduoduo are the three largest e-commerce companies in China. Baidu is a search-engine leader. Bilibili provides online entertainment for younger generations, including video content, and Tencent is a leader in messaging and gaming,
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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Source: https://www.investors.com/news/technology/alibaba-stock-jumps-china-eases-covid-restrictions-baba/?src=A00220&yptr=yahoo