Chinese tech companies Alibaba BABA, JD.com JD, and Baidu BIDU rose on Friday after positive GDP figures from China.
The good economic news boosted investor confidence, lifting U.S.-listed Chinese stocks and China-based ETFs.
Market sentiment was further enhanced by a speech by Pan Gongsheng, governor of the People’s Bank of China, who announced a support program for share buybacks.
According to the National Bureau of Statistics, there’s potential for more policy action this year, with a positive outlook for economic recovery despite a complex external environment.
GDP Highlights: China’s GDP grew by 4.6% year-over-year in Q3, surpassing a 4.5% forecast. This growth reassured investors about the country’s resilience.
Additional statistics included a 5.4% rise in industrial output and a 3.2% increase in retail sales, enhancing optimistic market activity.
ETFs Reaction: U.S.-listed ETFs focusing on Chinese companies surged following the news. The KraneShares CSI China Internet ETF KWEB increased by 4.5%, with both iShares China Large-Cap ETF FXI and iShares MSCI China ETF MCHI up by 4% each.
Impact on Alibaba: Alibaba benefits from positive retail growth, with a 3.2% increase encouraging consumer spending ahead of the holiday season.
Impact on JD.com: JD.com also benefited from the GDP figures, crucial as its operations depend on effective logistics and retail sales data.
Impact on Baidu: Baidu’s shares rose with the market, and its ventures in AI and advertising are set to gain from economic growth and increased spending.
Overall Significance: The positive economic data is vital as global markets scrutinize China’s growth amid challenges like a slowing property market.
While concerns about declining house prices persist, the encouraging data suggests that government measures may stabilize the economy, with potential additional fiscal initiatives being considered.
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