Why Shares of Alibaba, Bilibili, and Baidu Are Rising Today
Several Chinese stocks moved higher today after China's central bank unexpectedly lowered one of its key interest rates, leading investors to believe that more stimulus could be on the horizon.
Shares of the large Chinese tech conglomerate Alibaba (NYSE: BABA) were trading more than 2% higher today at 11:15 a.m. ET. Meanwhile, shares of the video-sharing company Bilibili (NASDAQ: BILI) traded more than 4% higher, while shares of the Chinese tech and search engine Baidu (NASDAQ: BIDU) were up more than 6%.
The People's Bank of China surprised the market today when it trimmed its seven-day reverse repo rate, a peg for short-term liquidity needs, from 2% to 1.9%. Central banks trim rates when they want to stimulate the economy because it makes borrowing cheaper and therefore more enticing. While a cut like this is nothing monumental, it's likely fueling excitement among investors that stimulus could be coming.
Source Fool.com
