China-based U.S.-listed stocks experienced a notable pre-market rally on Friday, driven by China’s better-than-expected GDP figures for the third quarter.
What Happened: Several major Chinese companies saw significant gains. As per Benzinga Pro, Alibaba Group Holding Ltd – ADR BABA rose by 3.23%, while its rival PDD Holdings Inc. PDD increased by 5.38%. Baidu Inc BIDU climbed 4.23%, and JD.Com Inc JD was up 5.05%. In the electric vehicle sector, Nio Inc – ADR NIO and Li Auto Inc LI saw increases of 5.44% and 6.48%, respectively.
China’s GDP grew by 4.6% year-over-year in the third quarter, surpassing expectations from a Reuters poll, though slightly below the 4.7% growth in the previous quarter. As per CNBC, this marks the slowest growth rate since mid-last year, moving further from Beijing’s 5% annual target.
Retail sales in September grew by 3.2% year-on-year, exceeding forecasts, and industrial output rose by 5.4%, also surpassing expectations. However, house prices fell by 5.8% year-over-year in September, a larger decline than the 5.3% drop in August. Meanwhile, the CSI 300 index in Mainland China surged 3.62% to close at 3,925.23, after hitting an intraday high of 5.5%.
Why It Matters: The recent economic data comes amid China’s efforts to stave off a potential economic downturn. In late September, China announced a series of stimulus measures, including a 50 basis-point cut to the mandatory reserve ratio and a reduction in the benchmark policy rate by 0.2 percentage points. The People’s Bank of China also reduced rates on existing mortgages and lowered the minimum down payment on second homes. Despite these efforts, investor sentiment remained cautious, as the absence of a large-scale economic package left traders underwhelmed.
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