Alibaba’s office building is seen in Nanjing, Jiangsu province, China, 28 August 2024.
CFOTO | Future Issue | Getty Images
Chinese technology stocks, including beaten-up names like Alibaba, rallied this week, hitting highs not seen in more than a year after China’s central bank announced measures to stimulate the world’s second-largest economy.
Hong Kong’s Hang Seng Tech Index, which covers most of China’s technology stocks, closed nearly 6% off its highest level since early August 2023. The index is up 20% this week.
Alibaba closed above $100 per share for the first time since August last year in the US, after surging 10% during the session. On Friday, shares of the Hong Kong-listed company hit their highest close since February 2023, up nearly 5% to 102.50 Hong Kong dollars. Shares of the e-commerce giant in Hong Kong are about 18% higher this week.
Tencentowner of China’s largest messaging app WeChat and one of the world’s largest gaming companies, closed up nearly 2% at 437.80 Hong Kong dollars per share. It was the company’s highest close in more than two-and-a-half years and comes after Tencent shares have rallied about 49% this year amid a recovery in its core gaming business.
The food delivery giant Meituan Meanwhile it ended the session 8% higher at 164.60 Hong Kong dollars, the company’s highest close since February last year.
The market uptick came after the People’s Bank of China this week announced cuts to the amount of cash that banks must hold. The central bank outlined plans to support the struggling property market, including extending measures for two years and cutting interest rates on existing mortgages.
These measures were announced in hopes of boosting China’s economy. Before the cut, investors had been cautious about Chinese tech stocks like Alibaba and Meituan which are sensitive to the economy and consumers in China.
However, large investors have begun to attacke bullish tone on Chinese stocks. Billionaire hedge fund founder David Tepper told CNBC on Thursday that, after the US Federal Reserve cut interest rates this month, he is buying more Chinese stocks including names like Alibaba and Baidu.
Other names included JD.com and Baidu also entered shows increases this week.
Despite the latest upswing, Chinese tech stocks remain far from high in 2021.
– CNBC’s Evelyn Cheng contributed to this report.
