Shares of Alibaba Group Holding Ltd. were flying high Wednesday, a day before the e-commerce giant’s earnings report, as part of a broad rally in the stocks of China-based companies after a sovereign fund promised to buy.
Alibaba’s fiscal third-quarter report is due out before Wednesday’s opening bell. While investors appear optimistic ahead of the release, the FactSet consensus of earnings per share has declined by 5% since the end of 2023 to 19.12 yuan (equivalent to $2.67) amid signs that China’s economy is continuing to struggle in the new year.
The FactSet sales consensus has fallen by roughly 5%, to 260.26 billion yuan (equivalent to $36.25 billion), since the end of the third quarter.
Read: Alibaba backtracks on cloud spinoff plans, sending stock tumbling after earnings
The company’s U.S.-listed stock
BABA,
ran up 3.9% in afternoon trading toward a three-month high. It has climbed 7.9% the past two days and has soared 13.9% since it closed at a 14-month low of $68.05 on Jan. 18.
Helping fuel the gains Tuesday, China’s Central Huijin Investment sovereign fund, which owns shares of state-run banks and government-controlled enterprises, said it would expand purchases of stock index funds in an effort to prop up a sagging stock market.
The iShares MSCI China exchange-traded fund
MSCI,
jumped 4.8% on Tuesday, putting it on track for its biggest one-day gain since July 28, 2023. The ETF has climbed 6.2% in the past two days, after it closed Friday at the lowest price since October 2022.
Among other more-active China-based companies’ stocks, Nio Inc.’s
NIO,
charged 9.9% higher toward its biggest gain so far this year.
The rally comes after the electric-vehicle maker’s stock closed Monday at its lowest price since June 2, 2020, amid concerns over softening demand for EVs at a time of increasing competition.
Also read: Nio’s stock tanks toward a record-tying loss streak as Tesla price cuts weight
The company last week reported January deliveries of 10,055 EVs. While that represented an 18.2% increase from the same period a year ago, deliveries were down 44% from December and down 37% from November.
Among other EV makers, Xpeng Inc. shares
XPEV,
jumped 11% to bounce off Monday’s eight-month closing low, and Li Auto Inc.’s stock
LI,
shot up 9%.
And shares of automaker BYD Co.
002594,
which trade over the counter in the U.S.
BYDDY,
surged 7.1% off Monday’s close, which was the lowest since Oct. 28, 2022.
Elsewhere, shares of JD.com Inc.
JD,
rallied 6.9%, shares of iQiyi Inc.
IQ,
ran up 10.6%, shares of Bilibili Inc.
BILI,
powered up 11.1% and shares of TAL Education Group
TAL,
tacked on 6.6%.
This story originally appeared on Marketwatch
