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Chinese Stocks: Why Are BABA and JD Stocks Both Gaining Today?

After months of regulatory fears eating away at their market capitalizations, Chinese stocks are up across the board following a surprisingly lucrative “Singles’ Day.” Respectively, Chinese e-commerce companies Alibaba (NYSE:BABA) and (NASDAQ:JD) are up about 3% and 8% so far as the markets react to excellent sales numbers from the holiday.

keyboard with the enter key replaced with "ecommerce" and colored like the chinese flag
Source: Shutterstock

Singles’ Day — which appropriately falls on 11/11 — is considered the major shopping holiday of China. It’s comparable to Black Friday in the U.S. (except much, much bigger). Like the U.S. equivalent, the deals typically start at the beginning of the month and carry on through the holiday itself. But while most retailers look forward to the season with inflated sales expectations, this year has been a bit more pensive.

China’s tech sector has been under duress ever since its government started cracking down on the once-unshackled internet industry. Video games, cryptocurrencies and online retail have been major victims of the China Securities Regulatory Commission’s (CSRC) campaign. Citing “common prosperity,” the government has reportedly wiped hundreds of billions in market value from many of the biggest names in Chinese stocks in just the past year.

As such, many suspected that this year’s Singles’ Day numbers would be muted as the biggest names in Chinese commerce attempted to keep a low profile. They were, however, wrong.

Chinese Stocks Rally on Record-High Holiday Sales

In a blog post on Thursday, Alibaba announced that close to 400 retail brands raked in more than 100 million yuan ($15.6 billion) from Nov. 1 to Nov. 11. Many of the big winners include major American fashion and tech brands like Estée Lauder (NYSA:EL), Nike (NYSE:NKE) and Apple (NASDAQ:AAPL). Meanwhile, Chinese brands like Huawei also reported great sales.

The big winners, though? Alibaba and

Alibaba created the commercial holiday in China, so it’s no surprise they made a killing. However, when you sell more in 24 hours than what Amazon (NASDAQ:AMZN) makes in half a quarter, you can rest assured shareholders will be smiling.

On the holiday alone, Alibaba recorded sales volume totaling around 246.4 billion yuan ($38.4 billion), 26% higher than last year’s 194.3 billion ($30.8 billion) figure. This comes after a fairly tumultuous week for the company and BABA stock.

Similarly, rival was also on a multi-day downtrend heading into the holiday. And just like their competitor, Singles’ Day magic managed to reverse the company’s fortune. JD also reported breaking previous sales records, racking up 311.4 billion yuan ($48.6 billion) across its platform through the holiday.

Of course, it should be noted that the figures mentioned refer to transaction volume. These numbers do not necessarily translate to revenue earned by the company and don’t take returned items into account.

Still, the rally in Chinese stocks is well-merited after surpassing sales numbers as well as consumer expectations. BABA stock and JD stock are approaching multi-month highs as the Singles’ Day fervor winds down.

On the date of publication, Shrey Dua did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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