Alibaba, US-listed China stocks soar as crackdown fears ease
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The nation's major technology firms were among the leading gainers with Alibaba advancing more than 6.2 per cent.
PHOTO: REUTERS
NEW YORK (BLOOMBERG) - US-listed China stocks surged on Monday (June 6) to the highest since early April on increased speculation that a year-long government crackdown on the technology industry is easing.
While the S&P 500 Index struggled to mount much of an advance, the Nasdaq Golden Dragon Index closed 5.4 per cent higher, after surging as much as 8.3 per cent, as Chinese regulators were said to be close to wrapping up their investigation of Didi Global.
The company's American depositary receipts soared 68 per cent at the start of United States trading before paring some of those gains, leaving them up more than 24 per cent from last Friday's close.
The Chinese authorities are said to be finishing their probe into Didi and appear set to restore its main apps to mobile stores as soon as this week, the Wall Street Journal reported.
The nation's major tech firms were among the leading gainers amid more optimistic sentiment towards the industry, with Alibaba Group Holding and JD.com each advancing more than 6.2 per cent.
"This is the most tangible sign that the government is in fact easing back on its regulatory scrutiny of the tech industry," said Mr Adam Crisafulli, the founder of Vital Knowledge.
China tech stocks had momentum building up for a few weeks on the back of easing Covid-19 restrictions and stepped-up stimulus measures, he added.
The string of positive news drew traders back to the battered stocks on bets that the worst is over for the sector, especially since recent actions suggest that policymakers may make good on repeated promises to soften their stance in recent months as economic growth slowed.
That also echoes the increasingly bullish outlooks from Wall Street analysts and strategists, including JPMorgan Chase's Dr Marko Kolanovic, who said the past year's deep sell-off in the group could finally be on the cusp of a turnaround.
Dr Kolanovic sees a buying opportunity in Chinese stocks, citing easing lockdowns, continued growth support measures and the potential conclusion of tech probes.
Still, the Nasdaq Golden Dragon Index has dropped some 65 per cent from its 2021 high, falling 18 per cent this year, with lingering market jitters that China's zero-Covid-19 approach could cause lockdowns to be implemented again.
