China stocks enjoy big, broad rally as Shanghai moves toward lifting COVID-lockdown measures
U.S.-listed shares of China-based companies traded broadly higher Tuesday, as investors were emboldened by the major steps to be taken to lift COVID-19-lockdown measures in Shanghai.
The Invesco Golden Dragon China exchange-traded fund PGJ, +4.96% charged up 4.6% in morning trading, with more than three-quarters of its active components enjoying gains, to buck the weakness in the broader stock market. That put the ETF, which is composed of U.S.-listed shares of companies based in the People’s Republic of China, on track for its highest close since May 4.
Meanwhile, the S&P 500 index SPX, -0.17% shed 0.9% and the Nasdaq Composite Index COMP, +0.15% lost 0.8%.
The PGJ’s most active component was electric vehicle maker NIO Inc.’s stock NIO, +6.22%, which ran up 4.3%. It has soared 18.1% amid a four-day win streak, and has rocketed 36% since closing at a 22-month low of $12.71 on May 11.
Also seeing heavy trading, shares of KE Holdings Inc. BEKE, +11.36% shot up 10.9% after the housing transactions platform reported a wider-than-expected first-quarter loss but revenue that beat forecasts, while e-commerce giant Alibaba Group Holding Ltd.’s stock BABA, +4.28% rallied 3.2%.
Shanghai authorities said they will take measures on Wednesday to reopen Shanghai, China’s largest city, as the Associated Press reported. That fueled investor optimism for a quick rebound in the country’s economy, which is the world’s second largest.
Among other more active American depositary shares, or ADS, of China-based companies, Pinduoduo Inc. PDD, +5.86% ran up 5.9% toward a three-month high, and have soared 38.4% amid a four-day win streak. Benchmark analyst Fawne Jiang reiterated a buy rating and $85 stock-price target, which implied about 66% upside from current levels, after the mobile marketplace had reported on Friday big profit and revenue beats for its first quarter.
Elsewhere, the ADS of iQIYI Inc. IQ, +1.76% rose 1.8%, JD.com Inc. JD, +6.14% climbed 5.7%, DiDi Global Inc. DIDI, +1.74% tacked on 0.5%, Tencent Music Entertainment Group TME, +1.47% advanced 2.3% and Bilibili Inc. BILI, +9.98% jumped 8.6%.
The Golden Dragon China ETF has dropped 21.9% to date in 2022, while the S&P 500 has lost 13.6% and the Nasdaq has tumbled 23.1%.
