Chinese tech ADRs rise as end of Didi probe raises hope of easing crackdowns
US-listed Chinese technology stocks rose on Monday after a report that regulators in China are concluding a probe into ride-hailing giant Didi Global raised expectations of easing crackdowns on the country's internet sector.
The Cyberspace Administration of China (CAC) is concluding its cybersecurity probe into Didi and two other companies, Full Truck Alliance Co and Kanzhun Ltd, and will allow their mobile apps back on Chinese app stores, the Wall Street Journal reported.
That sent Didi's shares surging about 50 per cent and lifted the broader USÂ market, with the tech-heavy Nasdaq up 1.8 per cent and the benchmark S&P 500 gaining 1.3 per cent.
Shares of Full Truck, known as the "Uber of trucks", and online recruiter Zhipin.com-owner Kanzhun rose more than 20 per cent each.
"The report adds to the optimism that regulatory crackdowns are closer to the end of the tunnel," said Christopher Wong, a senior strategist at Maybank in Singapore, adding it also fed into hopes about China's reopening and growth momentum.
Delisting fears, regulatory pressure and the impact of stringent COVID-19 lockdowns have led US-listed shares of China's biggest tech firms to post declines of up to 60 per cent this year.
US-listed shares of Chinese internet and e-commerce firms Alibaba Group, Baidu, JD.Com and Pinduoduo gained between 3.8 per cent and 11.2 per cent on Monday.
American depositary receipts (ADRs) of EV startups Li Auto, Nio and Xpeng rose in the range of 5.2 per cent to 14 per cent.
The question of how meaningful this rally can be remains, as traders brace for a USÂ Federal Reserve rate hike next week, with more set to follow that, Wong said.
The market expects the USÂ central bank to boost interest rates by 50 basis points this month and in July, and possibly by the same amount in September, as the Fed tries to tighten monetary policy fast enough to bring inflation down.
