Alibaba and other US-listed Chinese stocks jump following speculation Beijing is exploring an exit from its zero-COVID policy
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- US-listed shares of Chinese companies jumped Tuesday after speculation the government could end its zero-COVID policy.
- Alibaba, Nio, and Baidu shares were among the gainers.
- A Chinese official reportedly said he was unaware of the speculation.
Alibaba and stocks of Chinese companies that trade in the US climbed Tuesday following an unconfirmed social report the Chinese government may be moving toward shedding its strategy of managing COVID-19 infections.
Chinese equities soared after a social media post that was unverified said the ruling Communist Party was considering establishing a "reopening committee" to examine how to exit its policy that calls for mass lockdowns in areas where coronavirus outbreaks are detected.
In the US, shares of Alibaba rose 6.3% to $67.56 in premarket trade on New York Stock Exchange and competitor JD.com gained 8% on the Nasdaq. Electric vehicle maker Nio picked up 7.2% on the NYSE.
The Associated Press reported that a spokesman at China's foreign ministry, Zhao Lijian, told reporters he was "not aware of what you just mentioned" when asked about the rumor.
Hong Kong's Hang Seng Index advanced by 5.3% and the mainland's Shanghai Composite gained 2.6%.
"The reopening of China is THE big variable for 2023 and has been the hardest to try to model and time for markets. But when it does happen it will be huge for equities and for growth and the USD will likely suffer as a result," Brad Bechtel, global head of FX at Jefferies, said in a note. "It may also make central banks a little more aggressive than they otherwise would have been given the positive shock there."
Businesses and millions of Chinese residents have been forced by the government to undergo multiple rounds of lockdowns because of coronavirus infections. China is facing its slowest economic growth in about three decades. Gross domestic product expanded by 3.9% in the third quarter, better than anticipated but less than the government's 5.5% target.
Also moving higher in the US, e-commerce tech platform Pinduoduo jumped 9%, search engine heavyweight Baidu rose 7% and EV company XPeng tacked on 7.1%.
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