Shares of Alibaba Group Holding Ltd. were on the rise on Wednesday, as investor confidence grew following news of a sovereign fund's intention to buy shares. The e-commerce giant's fiscal third-quarter report is set to be released before Wednesday's opening bell. While optimism prevails, the FactSet consensus for earnings per share has dropped by 5% to 19.12 yuan ($2.67). This decline is attributed to ongoing challenges in China's economy.
Similarly, the FactSet sales consensus has fallen approximately 5% to 260.26 billion yuan ($36.25 billion) since the end of the third quarter.
Alibaba's U.S.-listed stock (BABA) has seen a 3.9% increase in afternoon trading, reaching a three-month high. Over the past two days, the stock has climbed by 7.9% and has soared by 13.9% since hitting a 14-month low of $68.05 on January 18.
The boost in investor confidence can also be attributed to China's Central Huijin Investment sovereign fund's announcement that it plans to expand its purchases of stock index funds, with the aim of supporting a struggling stock market.
Rally in Chinese Stocks Boosts EV Manufacturers and Tech Companies
The iShares MSCI China exchange-traded fund (ETF) experienced a significant surge on Tuesday, marking its largest one-day gain since July 28, 2023. The ETF skyrocketed by 4.8%, continuing its upward trajectory over the past two days. This positive trend comes after the ETF hit its lowest price since October 2022 at the end of last week.
Notably, Nio Inc., a prominent electric-vehicle (EV) manufacturer, saw its stocks surge by 9.9%, the biggest gain it has recorded this year. This achievement is particularly impressive considering the concerns surrounding softening EV demand and growing competition in the market. In fact, Nio's stock had reached its lowest price since June 2, 2020, just the day before.
Nio recently released data regarding its January EV deliveries, revealing a 44% decline from December and a 37% decline from November. While this figure still represented an 18.2% increase compared to the same period last year, market sentiment had been impacted by these decreases.
Furthermore, other EV makers experienced positive momentum as well. Xpeng Inc. witnessed an 11% surge in its share price, bouncing back from a eight-month low recorded on Monday. Li Auto Inc. followed suit, with a notable increase of 9%.
Even in the wider technology sector, companies demonstrated strong performance. JD.com Inc., iQiyi Inc., Bilibili Inc., and TAL Education Group recorded respective gains of 6.9%, 10.6%, 11.1%, and 6.6%.
Overall, Chinese stocks across various industries have shown remarkable resilience, rebounding from recent lows and reflecting investors' renewed confidence in these companies.
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