Chinese technology stocks advanced sharply on Friday, with Alibaba Group Holding Ltd. BABAF BABA jumping 11.41% in Hong Kong trading, as investors responded to positive earnings guidance and anticipated monetary policy easing from Beijing.
What Happened: Alibaba’s shares climbed to 134.70 HKD ($17.33) after CEO Eddie Wu announced expectations for the company’s International Commerce Unit to achieve profitability in the next fiscal year.
The broader tech sector rally saw gains across major Chinese companies, with Tencent Holdings Ltd. TCEHY rising 3.23% to 502.50 HKD ($64.66), Xiaomi Corp. XIACY surging 4.88% to 51.55 HKD ($6.63), Baidu Inc BAIDF adding 2.22% to 87.40 HKD ($11.25), and JD.com Inc. JDCMF climbing 2.47% to 157.50 HKD ($20.27).
The surge comes as economists predict China’s central bank could cut its main policy rate following the annual parliamentary meeting in March. The People’s Bank of China (PBOC) maintained its loan prime rates Thursday, keeping the one-year rate at 3.1% and the five-year rate at 3.6%.
Bruce Pang, an adjunct associate professor at the Chinese University of Hong Kong Business School, according to CNBC, forecasts a 50-basis-point cut to the reserve requirement ratio next month, with the seven-day reverse repo rate potentially decreasing by 40 to 50 basis points this year.
Why It Matters: The tech sector’s momentum builds on recent optimism following Chinese President Xi Jinping‘s supportive stance toward private enterprise, demonstrated at a high-level business symposium that included prominent tech leaders. The gathering notably featured Alibaba founder Jack Ma‘s first major public appearance with top leadership since Beijing’s 2020 regulatory crackdown.
However, investors are watching U.S.-China tensions, as recent tariffs imposed by President Donald Trump‘s administration and the Federal Reserve’s cautious approach to rate cuts could influence PBOC’s monetary policy decisions.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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