China is stepping up efforts to reignite growth in the world's second largest company – helping send U.S.-listed China tech stocks Alibaba, JD.com and Baidu higher. China-based messaging and gaming company Tencent also got a boost, with its U.S. shares breaking out from a flat base.
China's central bank announced several measures Tuesday that it hopes will bolster the country's flagging economy. The list includes cutting the benchmark interest rate and lowering the amount of cash banks are required to hold. The central bank will also offer funding for funds, insurers and brokers to buy stocks.
On the stock market today, Alibaba's U.S.-listed stock rallied 8% to close at 97.19. Rival e-commerce giant JD.com jumped 14% to close at 33.90. And Chinese internet services company Baidu gained 7.4% to close at 94.81. Meanwhile, over-the-counter U.S. shares of Tencent gapped up 7% to 53.64.
Alibaba Stock: Recent Breakout
U.S.-listed Alibaba stock was up about 17% this year, entering trading Tuesday. However, shares of the e-commerce and cloud computing company are still well below highs reached late in 2020.
The slumping economy in China has weighed on sales for its technology companies. Alibaba's revenue grew 4% for its June-ended quarter, while JD grew 1.2% and Baidu's sales were flat from a year earlier.
Alibaba stock scored a recent breakout. Shares climbed above an 85.79 cup-with-handle buy point, as identified by MarketSurge, on Sept. 19. The tech giant released new AI models and video-to-text capabilities that day.
Alibaba stock has an improving IBD Composite Rating of 81 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Tencent Stock Breaks Out
For Tencent, its gains Tuesday have its U.S. shares breaking out above a 50.89 flat base buy point on its weekly chart, according to MarketSurge. Shares of Tencent, the parent company of the super-app WeChat, are listed in Hong Kong and trade over-the-counter in the U.S.
JD stock, meanwhile, has formed a consolidation pattern with a 35.69 buy point, as identified by MarketSurge pattern recognition. JD.com gained after reporting better-than-expected Q2 results in August but tumbled a week later on news that Walmart sold its near 10% stake in the company.
Overall, U.S.-listed JD stock entered Tuesday up about 3% year-to-date.
U.S.-listed Baidu stock, on other hand, was down more than 25% on the year, entering Tuesday. The company is leaning on its AI offerings to boost growth as advertising sales have slowed. But shares fell 4% following Baidu's June-quarter earnings results in August. Baidu's adjusted earnings per share decreasing 7% year-over-year, with revenue was flat.
