Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Alibaba Shares Surge as Sales Beats Boost Sentiment

Published 2022-05-26, 10:28 p/m
Updated 2022-05-26, 10:28 p/m
© Reuters.

© Reuters.

(Bloomberg) -- Chinese tech shares jumped on Friday after two of the biggest Internet giants reported earnings that topped estimates, easing investor worries about the economic hit from Covid-19 lockdowns.  

Hong Kong’s Hang Seng Tech Index gained as much as 4.9%, the most in a week. E-commerce leader Alibaba (NYSE:BABA) Group Holding Ltd. and Baidu Inc (NASDAQ:BIDU). were among the top gainers, rallying by at least 13% each.

READ: Alibaba’s Sales Beat Eases Fears of Covid’s Economic Fallout 

Both Alibaba and Baidu reported sales growth that were higher than expected, suggesting some of China’s largest businesses have found ways to wade through strict Covid restrictions in key cities. The revenue beats offer a rare but encouraging sign in an economy that’s come to a standstill due to stringent movement controls. 

“We do expect the second quarter to mark the bottom in growth for our companies,” Ronald Keung, head of Asia Internet research at Goldman Sachs Group Inc (NYSE:GS). said in a Bloomberg TV interview. “Depending on the Covid policies and the government’s policies in helping to drive back consumption confidence, we do expect easier comps for China tech companies particularly as you enter into September and December quarter.”

China’s Premier Gives Dire Growth Warning in Unpublished Remarks

Investors are also hoping the more than a yearlong crackdown on private enterprise is approaching an end. Policy makers have been vowing support for the industry as part of their effort to support a slumping economy.    

The Nasdaq Golden Dragon China Index of Chinese firms trading in the U.S. jumped 7.6% on Thursday. Hong Kong’s Hang Seng Index gained as much as 3.3% on Friday while China’s CSI 300 Index climbed as much as 1.5%. 

Still, traders remain wary that fresh virus outbreaks and Beijing’s adherence to a Covid Zero policy may roil further market upside. Any policy support may also be gradual, with Tencent Holdings (OTC:TCEHY) Ltd. executives warning last week that it will take time for Beijing to act on promises to support the sector.  

©2022 Bloomberg L.P.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.