Alibaba shares jump as China relaxes Covid rules

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China’s stocks rose on Thursday as the nation’s government officials eased many of their Covid-zero controls that have crippled the world’s second-biggest economy. alibaba (BABA), as well as actions of (J.D.) and Baidu (BIDU) were among the climbers.

The loosening of Covid controls also comes as China has faced unprecedented nationwide protests. Alibaba’s shares rose 5.2% to 93, during morning stock market trading today. shares rose 2.7% to 60, while Baidu’s rose 4.5% to 120.

The rally also included bilibili (BILI), 6.5% to 23.15. pinduoduo (PDD) rose 4.6% to 89.80 and Tencent holdings (TCEHY) was up 3.7% at 40.75.

In a recent note to clients, Morgan Stanley upgraded its opinion on China stocks for the first time in two years.

“We are at the beginning of a multi-quarter recovery in earnings reviews and valuations,” the note said.

Alibaba shares hit by multiple events

Alibaba and other Chinese stocks in the technology sector have been under heavy pressure since around the first quarter of 2021. In addition to Covid-related restrictions, other threats to its business included burdensome regulations, supply chain issues, higher logistics costs, currency depreciation. , inflation and the weakening of the economy.

The new Covid guidelines come as trade data announced Wednesday showed Chinese exports in November fell at their steepest pace in more than two years.

Since hitting an all-time high in October 2020, Alibaba shares have plunged 69%. JD is 43% below its December 2020 all-time high. Pinduoduo is down 54% from its peak, while Baidu is down 58% and Bilibili is down 82%.

Alibaba, JD, and Pinduoduo are the three largest e-commerce companies in China. Baidu is a leader in search engines. Bilibili provides online entertainment for the younger generation, including video content, and Tencent is a leader in messaging and gaming.

Follow Brian Deagon on Twitter at @IBD_BDeagon for more information on technology stocks, analysis and financial markets.


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