Toa55/iStock via Getty Images
Chinese tech stocks flexed their muscles on Wednesday amid signs that Beijing is loosening up a bit on some of its tight regulatory controls over tech companies, in particular.
Investors rallied behind the likes of JD.com (NASDAQ:JD), Tencent Holdings (OTCPK:TCEHY) and Alibaba (NYSE:BABA) after Chinese regulators approved a capital expansion plan for Alibaba’s (BABA) finance affiliate, Ant Group. Under terms of the expansion, Ant Group will be allowed to raise $1.5B for it consumer finance unit. Such a move, along with China relaxing on many of its COVID-19 restrictions, has built up belief that the country will be more amenable to business growth this year.
Reaction to the new policy toward Ant Group was swift, as Alibaba (BABA) shares rose early, and remained up by almost 12% in as trading progressed. JD.com (JD) was another big winner, as its shares surged almost 15% and Tencent (OTCPK:TCEHY) was up by more than 6%.
Gains also came from Pinduoduo (PDD), which rose almost 9%, Baidu (BIDU), up by 10%, NetEase (NTES), which climbed by more than 8% and electric car automaker Nio (NIO), which was up by more than 12%.
The KraneShares CSI China Internet ETF (KWEB) joined in the day’s gains, and rose more than 8%.
Wednesday’s gains among Chinese tech stocks came on the heels of Tuesday’s advance that was spurred on by comments from China’s new foreign minister about his hopes for improving ties with the United States.