U.S.-listed stocks of Chinese technology companies rose on Thursday as investors concentrated on signs of support from Beijing, while brushing off more disappointing economic data.
American depositary receipts of
Alibaba
(ticker: BABA) were up 1.4% in premarket trading.
JD.com’s
(JD) ADRs rose 2.9%. Alibaba’s Hong Kong shares closed more than 3% higher, and JD.com’s surged 6.4%, while
Meituan
(3690.Hong Kong) was 5.8% up.
Premier Li Qiang on Wednesday met top management from several internet companies including Alibaba’s cloud unit. Chinese state-run newspaper the Global Times reported that Li praised China’s platform economy as an economic engine and that he expected state authorities to pursue normalized regulation for the sector.
“The comments […] signify that the Chinese authorities are turning to mega-cap internet companies as an instrument to pursue industrial policies, create employment, and attempt to tackle choke points in critical technology,” Saxo Bank analyst Redmond Wong wrote in a research note on Thursday.
The signs that Beijing’s crackdown on the tech sector might be easing outweighed more concerning economic data as Chinese exports decline further in June, signaling weak global demand.
China’s exports fell more than expected in June, official data showed Thursday. Outbound shipments fell 12.8% from a year earlier, compared with a 7.5% decline in May, the General Administration of Customs said. Economists surveyed by The Wall Street Journal had expected a 9.2% fall.
China’s trade surplus was $70.62 billion in June, higher than $65.81 billion in May but lower than the projected $74.0 billion.
“We’ve seen this trend all year and clearly, conditions are not improving, quite the opposite… Targeted stimulus may be needed sooner rather than later or the country’s once seemingly modest 5% growth target may be at risk of being missed,” wrote Craig Erlam, market analyst at OANDA, in a research note.
Chinese officials have been relatively public about the country’s worse-than-expected recovery from the Covid-19 pandemic in recent weeks as the country hovers on the brink of deflation.
Write to Adam Clark at [email protected]
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