- Alibaba and other Chinese stocks traded higher Wednesday after China approved the most video games in nearly a year.
- The approval of 60 games suggested Beijing is continuing to loosen up on its crackdown of the tech sector.
- JD.com reached a three-month high during Wednesday's session.
Alibaba shares jumped alongside other US-listed Chinese technology stocks Wednesday, with the approval of a new batch of video games in China lifting expectations that Beijing remains on course to further relax its crackdown on the tech sector.
Alibaba soared as much as 12% to $117.28, the strongest price for the e-commerce heavyweight since April 4. The rise was later pared to 10%. Shares of rival online retailer JD.com soared 8% to $66.94, its highest since March 4, and Baidu rose 1.5%.
The gains helped push the S&P/BNY Mellon China ADR Index toward a third straight advance.
China's National Press and Publication Administration, or NPAA, on Tuesday gave the green light to 60 online games, the largest approval of titles for the country's $45 billion market for online entertainment since July 2021, according to the South China Morning Post.
The approval suggested Beijing is continuing to loosen its regulatory grip on the broader tech sector, a crackdown that's wiped out billions of dollars in market valuation and has weighed on the world's second-largest economy.
The SCMP reported the NPAA didn't approve any titles from NetEase. The company's Nasdaq-listed stock, however, advanced on Wednesday, rising 3% during the session.
"The noise around Chinese tech continues to grow. There are increasing hopes that the regulatory onslaught is ending and instead the focus will shift to technology as an engine for economic growth," Huw Roberts, head of analytics at Quant Insight, in a note Tuesday about whether investors are seeing a turning point following the slide in technology stocks.
The Wall Street Journal on Monday reported that Chinese authorities were ending a cybersecurity investigation of the ride-hailing app Didi. Didi shares climbed 12% on Wednesday.
In April, the Chinese government reportedly said it would introduce measures to support the tech sector and pledged further economic stimulus measures as the country faces the slowest growth in three decades, at 5.5%.
"Given how brutal the sell-off has been since November 2020 when Beijing first suspended Ant's IPO, bottom-up analysis suggests valuations are cheap and there's increased chat about a catch-up trade," Roberts wrote.