Chinese stocks surged Wednesday to their best day since 2008 as government officials signaled their regulatory crackdown could end soon.
Alibaba (BABA), JD.com (JD), Baidu (BIDU) and other Chinese stocks bounced off multiyear lows. The stocks have been repeatedly hammered for more than a year, due largely to regulations, Covid-19 fears and macroeconomic concerns.
China financial officials said the regulatory crackdown on technology companies could end soon. They also plan to support overseas stock listings and build stability in capital markets “as soon as possible,” it was reported by state media.
Alibaba stock soared 36.8%, closing at 104.98 on the stock market today. JD.com stock catapulted 39.4% to 64.08, while Baidu jumped 39.2% to 150.87.
Other Chinese Stocks On The Move
Shares of China-based biotech companies Zai Lab (ZLAB), BeiGene (BGNE) and Hutchmed (HCM) also soared on the news. These three were among five stocks listed by the Securities and Exchange Commission as being out of compliance with auditing rules. They were given until March 2024 to resolve the issue or face delisting.
Zai Lab stock soared 23.2%, closing at 35.81. BeiGene climbed 25.1% to 183.33 and Hutchmed jumped 19.6% to 19.01.
The positive comments state officials came a day after China stocks plunged to 21-month lows. The broad rout in Chinese stocks also followed a report that Russia has asked China for military assistance in its war on Ukraine. Traders worry that China’s help for Russia could bring a global backlash against Chinese firms, even sanctions. Also applying pressure were threats of China companies being delisted by U.S. exchanges.
Index Logs Its Biggest Gain
On Wednesday, however, the Hang Seng Tech Index, which was down nearly 70% from a February 2021 peak, logged its biggest daily gain of 22%. The flagship Hang Seng Index climbed 9.1%, its largest one-day percentage increase since late 2008.
Before Wednesday’s surge, in the past 12 months Alibaba stock had lost 65% of its market value. JD had dropped 47%, while Baidu was down 58%.
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Staff Writer Allison Gatlin contributed to this article.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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