Market News

BABA Leads Chinese Stocks Higher as COVID-19 Restrictions Ease

Major Chinese names are seeing sharp gains today as the country slowly moves away from strict COVID-19 restrictions after witnessing multiple protests.

Commuters in Shenzhen and Beijing will not have to take COVID-19 tests anymore to avail public transportation. At the same time, the country continues to see new COVID-19 cases hovering about the 30,000 mark.

Tech major Alibaba’s (BABA) shares are already up nearly 4% in the pre-market trade today. EV makers NIO (NIO) and XPeng (XPEV) too are up 6.3% and 12% respectively.

Despite this uptick, the path ahead remains anything but nonvolatile for Chinese stocks. Despite the country’s recent moves, the final trajectory of COVID-19 restrictions will hinge on the daily trend of new COVID-19 cases across major cities.

Further, the recent spate of protests could take an unexpected turn – something the markets could be unprepared for.

The Direxion Daily FTSE China Bull 3x Shares ETF (YINN) is up a whopping 97.7% over the past month. The Direxion Daily CSI 300 China A Share Bull 2x Shares ETF (CHAU) too has put on 25% gains during this period.

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