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Investing.com – Alibaba Group Holding Ltd. (HK:9988) shares soared on Friday, with Chinese tech shares on an upwards trend after its earnings that topped estimates and eased investor worries about the economic impact of China’s COVID-19 lockdowns.
Alibaba’s Hong Kong shares jumped 12.39% to HK$91.15 ($11.61) by 1:22 AM ET (5:22 AM GMT). Fellow e-commerce Baidu Inc. (HK:9888) also saw its Hong Kong shares soar 14.95% to HK$133.
Hong Kong’s Hang Seng Index gained as much as 3.3% on Friday and Hang Seng Tech Index climbed by as much as 4.9%, the most in a week. The Nasdaq Golden Dragon China Index of Chinese firms trading in the U.S. jumped 7.6% on Thursday and China’s CSI 300 Index rose as much as 1.5%.
Both Alibaba (NYSE:BABA) and Baidu (NASDAQ:BIDU) reported higher-than-expected sales growth, a sign that some of China’s largest corporations have found ways to work around the country’s strict COVID restrictions. It is also a rare but encouraging sign in an economy whose outlook has been dimmed due to the restrictions.
“We do expect the second quarter to mark the bottom in growth for our companies,” Goldman Sachs Group Inc. head of Asia Internet research Ronald Keung told Bloomberg.
“Depending on the COVID policies and the government’s policies in helping to drive back consumption confidence, we do expect easier comps for China tech companies particularly as you enter into September and December quarters.”
Hopes are also growing that a yearlong crackdown on private enterprise is coming to an end, with authorities vowing support for the industry as part of efforts to support the economy.
However, investors remain concerned that further COVID-19 outbreaks could hinder these efforts. Any policy support could also be gradual, and Tencent Holdings Ltd (HK:0700) executives warned during the previous week that it will take time for the government to act on promises to support the sector.
