Why Alibaba Shares Are Rising

Alibaba Group Holding Ltd BABA is trading higher Monday after the People's Bank of China announced it will cut reserve requirement ratios next week.

The reserve requirement ratio cut from China’s central bank will be the second reserve ratio cut this year. The move aims to support the Chinese economy by injecting liquidity into the system.

The People's Bank of China will cut the reserve requirement ratio for major commercial banks by 0.5 percentage points. The cut is expected to release 1.2 trillion yuan ($188 billion) worth of long-term liquidity into the banking system.

Chinese stocks have been trending lower in recent months.

See Also: Alibaba Leads Hang Seng Lower After Management Change; JD, Tencent And Nio Rivals Xpeng, Li Auto Also Tumble

Alibaba operates China's most-visited online marketplaces, including Taobao (consumer-to-consumer) and Tmall (business-to-consumer).

BABA Price Action: Alibaba has traded as high as $274.29 and as low as $119.34 over a 52-week period.

The stock was up 7.40% at $120.22 at time of publication.

Photo: hinglish Notes from Flickr.