Chinese Tech Stocks Rise on Stimulus Boost

Chinese tech stocks, including Alibaba and JD.com, are experiencing a surge early Friday as investors evaluate the potential impact of a fresh stimulus package. The People's Bank of China recently injected a record-breaking 800 billion yuan ($113 billion) into the banking system via its one-year policy. This move aims to provide commercial lenders with much-needed liquidity.

Furthermore, both Beijing and Shanghai have implemented new measures to support the struggling property market. These measures include a reduction in down-payment ratios for home purchases and an extension of mortgage repayment deadlines.

China's state media has also indicated that more policy adjustments will be made in 2024 to aid economic recovery. The combination of these measures and hopes for additional stimulus led to an optimistic sentiment among investors.

However, disappointing retail sales and home price data have kept the possibility of further stimulus open. November's retail sales recorded a 10.1% year-over-year increase, surpassing October's 7.6% growth but falling short of economists' expectations for a 12.5% rise. On the other hand, Chinese house prices dropped for the fifth consecutive month, with a 0.2% decline compared to November last year. Additionally, prices for new homes in major Chinese cities fell by 0.4% month over month.

Despite these challenges, there was positive news regarding industrial production, which increased by 6.6% in November, surpassing economists' consensus of a 5.6% growth.

In response to the overall situation, Chinese tech stocks experienced a significant boost. Alibaba shares rose by 3.7% in Hong Kong trading, while its American depositary receipts (ADRs) increased by 1.5% before the market opened. JD.com saw a rise of 7% in Hong Kong and its ADRs pointed to a 3.9% increase. Baidu shares were up by 1.7% in U.S. premarket trading, and PDD saw a 1% rise.