What's Going On With Chinese Stocks Alibaba, NIO, XPeng, Li Auto On Tuesday?

Chinese tech industry barometer Alibaba Group Holding BABA stock gained on Tuesday after China’s central bank announced plans to slash banks’ reserve requirement ratio (RRR) by 50 basis points or half a percentage point.

The central bank will also cut the seven-day reverse repurchase rate to 1.5% from 1.7%. 

Alibaba rivals Baidu, Inc BIDU, PDD Holdings Inc PDD, and JD.com, Inc JD also noted an upward movement in their stock prices in Tuesday premarket trading.

Battered Chinese electric vehicle stocks, including NIO Inc. NIO, XPeng Inc. XPEV, Li Auto Inc. LI, and ZEEKR Intelligent Technology Holding ZK, were also up on Tuesday premarket.

Also Read: Alibaba Teams Up With Nvidia to Supercharge EVs for Chinese Automakers: Report

The Chinese companies have been battling the double whammy of a weak domestic economy and geopolitical tensions with the U.S., impairing their artificial intelligence technology ambitions.

Alibaba and its peers struggled with intense domestic price wars in their e-commerce and cloud businesses as the U.S. restricted their access to sophisticated AI chips, restricting their growth momentum.

AI technology has been pivotal in upgrading hyperscaler businesses, including e-commerce, logistics, electric vehicles, and more.

Last week, the stocks got a boost from the U.S. Fed rate cut. The U.S. Fed slashed the lending rate by 50 bps, lowering the central bank’s benchmark rate to 4.75%-5% to spur demand. Analysts expect the cut to drive growth in discretionary spending from U.S. companies.

Investors can gain exposure to Chinese stocks through iShares China Large-Cap ETF FXI and KraneShares Trust KraneShares CSI China Internet ETF KWEB.

Price Actions: At the last check on Tuesday, BABA stock was up 6.25% at $95.72 premarket. PDD was up 5.32% at $107.71, JD was up 8.53% at $32.30, BIDU was up 5.12% at $92.80, NIO was up 8.08%, XPEV was up 7.85%, LI was up 8.96%, and ZK was up 6.74%.

Also Read:

• Chinese Stocks Defy Biden’s Auto Import Ban Concerns, Rally To 4-Month Highs As Central Bank Unexpectedly Slashes Interest Rates

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