Financing News Drives Stock Higher
Shares in Chinese tech giant Alibaba are trading over 3% higher ahead of the open today. This comes on the back of a 15% move higher yesterday as the company’s shares gapped higher at the open. The lift in bullish sentiment is a reaction to the news that Chinese regulators have approved the Ant Group’s request increase the registered capital for the company’s consumer section from 8 billion yuan to 18.5 billion yuan.
Better Conditions for Alibaba
The announcement has stoked optimism that the Chinese government’s crackdown on the group’s internet sector has ended. Alibaba CEO Jack Ma had fallen foul of the government, leading to much stricter business conditions for the group which drove stock prices lower into the pandemic. However, this latest news suggests a better relationship between the two, a major boost for Chinese stocks and the tech sector broadly.
Chinese Stocks Shrugging Off Covid Fears
Chinese US-listed stocks have seen their strongest start to the year on record as a result of the move in Alibaba this week. Indeed, Chinese stocks on the whole are rallying with the Shanghai Composite seeing straight gains this week despite the worrying news around the escalating covid crisis in China. For now, at least, it seems that positive news elsewhere is helping offset bearish sentiment.
The breakout above the bear trend line and the 86.90 level resistance is an important development for the stock. Price is currently testing the bull channel top ahead of the next big resistance level around the 110.48 mark. While price holds above 86.90, the focus is on a continued push higher towards 129.64 longer term.