Why Chinese Stocks Are Ripping Higher Today
Another day and more news about Chinese stocks. The group ripped higher after Chinese leaders pledged further support for the Chinese economy following an unexpected meeting Thursday.
Shares of the fast food company Yum China (NYSE: YUMC) surged as much as 20% this morning before giving away some of those gains. Meanwhile, shares of the e-commerce company PDD Holdings (NASDAQ: PDD) and the search engine and artificial intelligence company (NASDAQ: BIDU) rose as much as roughly 15% and 12%, respectively, this morning before giving back some of the gains.
Starting on Tuesday, China's central bank rolled out a slew of stimulus measures and interest rate cuts to try to lift China's struggling economy and hopefully revive the government's 5% gross domestic product target growth rate this year, which analysts are now concerned about. Those measures include lowering reserve requirements at banks, so they have more capacity to lend, dropping interest rates and down payment requirements on mortgages, and injecting capital into financial companies in China so they could do more investing whether in stocks or even repurchasing their own stock.
Source Fool.com
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