With China reportedly loosening its restrictions to curb Covid-19 infections, several travel stocks are on the move today. Two stocks in particular, Tuniu (NASDAQ:TOUR) and Trip.com (NASDAQ:TCOM), have clearly caught the attention of buy-side traders this morning.
Earlier this year, a fresh wave of Covid-19 infections put negative pressure on an already-troubled Chinese economy. The nation implemented a “zero-Covid” policy, which weighed heavily on travel companies with business in China.
Yet, there’s been some relief for these companies and their investors. China’s government reportedly said it will shorten the quarantine time for international travelers as well as those who have come into close contact with Covid-19 patients. Specifically, it will be reduced from 21 days to 10 days.
Furthermore, China’s government said it will loosen its testing requirements for people in quarantine. Also, travelers to China will be isolated for one week (previously two weeks) in a centralized location before monitoring their health for a further three days (previously one week) at home.
What’s Happening with Travel Stocks Today?
A number of economic sectors might benefit from China’s looser Covid-19 restrictions. However, this should prove to be a particularly major boon for travel companies with exposure to China.
Today’s traders quickly absorbed the news and reflected their relief in several travel stocks. Two stocks that moved with unusual speed and trading volume are TOUR and TCOM.
TOUR stock, which represents online packaged tour provider Tuniu, jumped 40% on the news of China’s restriction roll-back. If the upward momentum continues, this stock could test the crucial $1 level.
Meanwhile, shares of travel service provider Trip.com surged 17%. The buyers seem to be targeting the critical $30 resistance level, so keep an eye out for more bullish price action.
Notably, both TOUR and TCOM stock have been on persistent downtrends since the beginning of the year. However, today’s move could be the start of a recovery, or at least a cessation of the bear market, in these travel stocks.
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On the date of publication, David Moadel 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 InvestorPlace.com Publishing Guidelines.
