(Bloomberg) — Chinese stocks listed in the U.S. got a much-needed dose of good news on Tuesday after state-backed funds were said to have entered the local market to buy shares to help stem declines that have accelerated in recent weeks.
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American depositary receipts of large-cap technology stocks surged, with Alibaba Group Holding Ltd. and Pinduoduo Inc. gaining 6.2% and 13% respectively. Meanwhile, shares of embattled ride-hailing firm DiDi Global Inc., search engine giant Baidu Inc. and online retailer JD.com Inc. each rose by 3% or more.
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The buying by China’s so-called “national team” comes as the domestic stock market reopened for trading after being closed for a week for its annual Lunar New Year holiday. Before that break, the nation’s benchmark equity gauge had fallen into a bear market amid growing concern about the economy and a resurgence of Covid-19 cases.
U.S. investors are hoping that renewed support from state funds will help reverse the yearlong selloff seen by shares listed outside of Mainland China. The Nasdaq Golden Dragon China Index — which tracks firms on U.S. exchanges that conduct a majority of their business in China — has plunged about 59% from a record last year, including a drop of 5% to begin 2022. The gauge rose 3.9% on Tuesday for its biggest gain since it jumped 10% at the end of last month.
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Still, tensions between Beijing and Washington remain high with the U.S. Department of Commerce adding 33 Chinese entities to its unverified list. The list, which differs from the Entity List, may require those firms to acquire additional licenses in order to buy products from U.S. companies. Wuxi Biologics Cayman Inc. ADRs sank 16% in U.S. trading Tuesday after being added to the list and seeing its shares suspended in Hong Kong.
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