Chinese technology stocks advanced sharply on Friday, with Alibaba Group Holding Ltd. (OTC:BABAF) (NYSE: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 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.
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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