Alibaba and Other Chinese Tech Stocks Are Rallying. Cathie Wood Is Back in the Game.
Alibaba stock was rallying in premarket trading on Tuesday.
Greg Baker/AFP via Getty Images
Chinese tech stocks rallied early on Tuesday, as Alibaba, JD.com, and Tencent all made impressive gains and Cathie Wood’s ARK got back in the game.
The sector, which has been under pressure recently due to a wide-ranging regulatory crackdown in China, enjoyed a sharp rebound as the regulatory outlook became clearer and investors looked for buying opportunities.
One such investor was seemingly Cathie Wood, whose ARK Invest snapped up 164,889 of JD.com’s American depository receipts (ADRs). The company’s Hong Kong-listed shares soared 15% on Tuesday after second-quarter earnings beat expectations. The ADRs were close to 8% up in premarket trading.
ARK’s largest fund, ARK Innovation, dumped almost all its Chinese stocks at the end of July as Beijing’s regulatory crackdown intensified.
JD.com wasn’t the only name surging early on Tuesday, Alibaba stock was 5% higher in premarket trading, after the e-commerce giant’s Hong Kong shares rose 9.5%. Tencent stock climbed close to 9% in Hong Kong trading, while Baidu was 4% up in New York premarket trading.
A promise by China’s central bank to keep monetary policy stable was also seemingly behind the rally. “The People’s Bank of China will keep monetary policy stable with a good cross-cyclical design and will support high-quality economic expansion with ‘appropriate money growth,’” the PBOC said in a statement late Monday.
“We think the reversal in Hong Kong of 7% off lows, the general rise of Asian equities, the bounce back of 11% from Alibaba, and the soaring commodities prices, where iron ore was up 10% at one point overnight in Singapore… All can be linked back to that statement,” Andrew Brenner, head of international fixed income at NatAlliance Securities, said in a note.
Write to Callum Keown at [email protected]
