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Alibaba’s strong report helped drive a rally in its tech peers, with JD.com (NASDAQ:JD), Pinduoduo (NASDAQ:PDD) and Baidu Inc (NASDAQ:BIDU) all seeing gains of at least 2% in premarket trading. Shares of the e-commerce giant gained as much as 7.2%, putting it on track to climb for a fourth consecutive day.
“The company mentioned the business recovery in June which should help other ecommerce players like JD.com and Pinduoduo,” said Henry Guo an analyst at M Science LLC. “Investors had low expectations on China ADRs before this print but Alibaba reports suggests likely business upsides to expectations for those companies.”
Chinese tech stocks have been through a tumultuous ride for more than a year amid regulatory crackdowns and a series of bruising lockdowns that damped consumption. While some analysts have been optimistic about earnings results, traders have been offloading the nation’s stocks with the Nasdaq Golden Dragon China Index down about 20% this year after an 11% decline in July. Still the benchmark has climbed 38% from a March low.
Read more: Alibaba Sales Beat Estimates, Defying Economic Turmoil (1)
Now, Alibaba’s sales beat may be a welcome sign for investors even as the stock continues to face a litany of other headwinds including a struggling Chinese economy alongside regulatory concerns from authorities in both Beijing and Washington. Last week the company was added to the US Securities and Exchange Commission’s list of stocks that are at risk of being de-listed from American exchanges. That came just days after Alibaba said it would be seeking a primary listing in Hong Kong.
All eyes will be on quarterly results due from other Chinese tech giants like Baidu, JD.com and Pinduoduo, which are all expected to release their numbers later this month. Baidu’s shares have dropped about 8% this year, while JD.com and Pinduoduo fell more than 12% each.
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