What's Going On US-Listed Chinese Stocks On Friday?

US-listed Chinese stocks responded positively to the People’s Bank of China’s latest move on key rate policy.

China’s central bank maintained its key policy rate in October, meeting expectations after last month’s rate cuts to boost the economy.

On Friday, the People’s Bank of China injected 700 billion yuan ($98.36 billion) into the banking system through its one-year medium-term lending facility, keeping the rate steady at 2.0%, the Wall Street Journal reports.

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This move involved a net cash withdrawal of 89 billion yuan as the central bank shifted focus to short-term tools for market guidance.

In a separate operation, the PBOC added 292.6 billion yuan via a seven-day reverse repo at an unchanged rate of 1.5%.

Chinese tech giant Alibaba Group Holding BABA, JD.com, Inc JD, and Baidu, Inc BIDU are trading higher on Friday. Electric vehicle companies NIO Inc NIO, Li Auto Inc LI, XPeng Inc XPEV, and ZEEKR Intelligent Technology ZK are trading higher too.

China’s latest easing cycle began in late September when the PBOC slashed the one-year MLF rate from 2.3% to 2.0% and reduced the seven-day reverse repo rate by 20 basis points.

The central bank also decreased reserve requirements, freeing 1 trillion yuan for lending, with another adjustment expected by year’s end.

China’s commercial banks responded by cutting benchmark lending rates by 25 basis points on Monday, aiming to support the property market.

This week, the IMF cut China’s 2024 growth forecast from 5% to 4.8% due to low consumer confidence and property market challenges.

Despite these issues, international institutions, including UBS and Goldman Sachs, raised their 2024 growth forecasts for China, predicting growth could approach 5% following recent stimulus efforts.

Price Actions: At the last check on Friday, BABA stock was up 2.47% at $98.172. JD is up 3.29%, BIDU is up 1.33%, NIO is up 5.54%, LI is up 6.41%, XPEV is up 7.65%, and ZK is up 14.50%.

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Photo by Oleg Elkov via Shutterstock