Chinese e-commerce giants Alibaba, JD.com, Pinduoduo see stocks rise after stimulus package (video)

Shares of U.S.-listed Chinese e-commerce companies surged Tuesday after China’s central bank announced its first economic stimulus measures since the pandemic.

Online retail giants Alibaba (BABA), Pinduoduo (PDD) and JD.com (JD) — some of China’s largest companies by market capitalization — led the gains Tuesday morning, with Alibaba up 7%, Pinduoduo up nearly 10% and JD.com up about 11%.

The People’s Bank of China unveiled a series of monetary stimulus measures in its latest attempt to revive the country’s struggling economy. As Yahoo Finance reporter Jared Blikre explained in Tuesday’s Morning Brief, the central bank cut key interest rates and eased reserve requirements for banks, freeing up cash to boost lending.

The measures are aimed at making it easier for households and businesses to access loans at lower rates, helping to boost spending and investment in an economy that has been hit by weak demand and a cooling housing market. The measures, among others in the stimulus package, are expected to free up about 1 trillion yuan, or more than $140 billion, in liquidity.

The Chinese stock market reacted positively to the news, with the CSI 300 (000300.SS), Shanghai Composite (000001.SS) and Hang Seng Index (^HSI) all rising more than 4%. Other Chinese tech stocks, including Baidu (BIDU), NetEase (NTSE) and Tencent (0.700.HK), also rose on the news.

Technology companies, including giants like Alibaba, have struggled in China in recent years. A national regulatory crackdown on the industry that began in late 2020 has cost large Chinese companies in the sector a combined $1 trillion year-on-year.

Alibaba completed a three-year overhaul this summer, aligning itself with tougher Chinese regulations after an antitrust investigation that led to a $2.6 billion fine from Chinese regulators. Despite the recent rally — Alibaba shares are up 23% year to date — the company’s stock is still far below its late-2020 highs of more than $300. Shares of JD.com, Pinduoduo, Tencent and NetEase also remain far below their early-2021 highs.

Some experts doubt that China’s economic stimulus measures will be enough to boost its economy or influence global markets.

“Lower mortgage rates on existing loans may help households, but they do nothing to stop the decline in housing prices or aggregate income or jobs,” Jeffrey Kleintop, Charles Schwab’s chief global investment strategist, told Yahoo Finance. “That’s positive news, but it’s unclear how long-lasting the impact will be on stocks.”

Stephanie Roth, chief economist at Wolfe Research, added: “We’ve heard this before, that China is going to ease monetary policy, and people are excited about the impact that will have on the global economy. And yet, that hasn’t happened.”

Laura Bratton is a reporter for Yahoo Finance.

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