Investors in U.S.-listed Chinese technology companies are focusing on signals of support from Beijing, resulting in an increase in stock value. Despite disappointing economic data, shares of Alibaba and JD.com saw significant gains.
Alibaba’s American depositary receipts (ADRs) rose by 1.4% in premarket trading, while JD.com’s ADRs surged by 2.9%. Both companies also experienced positive growth in their Hong Kong shares, with Alibaba’s closing more than 3% higher and JD.com’s rising by 6.4%. Additionally, Meituan saw a 5.8% increase in its Hong Kong shares.
The potential easing of Beijing’s crackdown on the tech sector outweighs concerns over weak economic data. Recent figures show that Chinese exports further declined in June, pointing to global demand weaknesses. Official data revealed a 12.8% year-on-year drop in outbound shipments compared to economists’ projected decline of 9.2%.
Despite a decrease in exports, China’s trade surplus in June reached $70.62 billion, higher than May but lower than the projected $74.0 billion.
Market analyst Craig Erlam from OANDA believes targeted stimulus measures may be necessary to avoid missing the country’s already modest 5% growth target.
Chinese officials have been open about the country’s weaker-than-anticipated recovery from the Covid-19 pandemic in recent weeks, raising concerns about possible deflation.
