Chinese tech companies Alibaba BABA, JD.com JD, and Baidu BIDU rose early Friday due to better-than-expected China GDP growth.
The positive economic news boosted market confidence, leading to gains in U.S.-listed Chinese stocks and related ETFs.
Moreover, a Bloomberg report highlighted optimism following a speech from People’s Bank of China (PBOC) Governor Pan Gongsheng about a new share buyback support program that lifted market spirits.
The National Bureau of Statistics expressed that there is “large room” for further policy action, anticipating economic recovery despite a complex external environment, according to Bloomberg.
GDP Highlights: China’s GDP grew by 4.6% year-over-year in Q3, surpassing a 4.5% forecast. While slightly below the previous quarter’s 4.7%, this reassured investors about China’s economic resilience.
Other indicators, like a 5.4% rise in industrial output and a 3.2% increase in retail sales, bolstered optimism during Friday’s trading.
Read Also: China Plans $850B Special Treasury Bonds for Economic Stimulus
U.S.-listed ETFs related to Chinese companies surged, with the KraneShares CSI China Internet ETF KWEB up 4.5%. The iShares China Large-Cap ETF FXI and iShares MSCI China ETF MCHI also gained 4% each as investors reacted to the favorable data.
Impact on Alibaba: Alibaba, which thrives on retail sales, benefits from the improved retail figures. With a 3.2% rise in sales in September, the company is set to gain during the holiday season.
Impact on JD.com: JD.com, also connected to retail sales, experienced positive effects from the GDP data. The 5.4% industrial output increase is crucial for maintaining its supply chain efficiency.
Impact on Baidu: Baidu, China’s leading search engine, benefited from the tech stock rally. Its expansion into AI and autonomous driving positions it well for increasing demand as the economy grows.
The Bigger Picture: This encouraging economic data comes at a critical time as global markets worry about China’s growth amid a sluggish property market and geopolitical issues. Concerns over falling house prices persist, but the overall economy seems to be strengthening, potentially stabilizing due to targeted stimulus measures.
Furthermore, Beijing is reportedly considering additional financial strategies, such as the $850 billion special treasury bond to boost the economy, paving the way for continued growth in China’s stock market.
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