Chinese ADRs Jump as Hong Kong and Mainland China Stocks Climb

Chinese ADRs jumped in premarket trading on Monday as Hong Kong and Mainland China stocks climbed. YINN rose 3%; Baidu rose 7%; Hesai and NetEase rose 5%; Alibaba rose 4%; XPeng rose 3%; Tencent Music rose 2%; PDD Holdings rose 1%; JD.com and NIO rose 0.7%.

The Hang Seng Index gained 0.9% on Monday, while SSE (Shanghai Stock Exchange) Composite Index rose 0.4%.

Investors are on the lookout for volatility in mainland stocks, which were jolted by the biggest sell-off in almost five months last week on concerns about rapid gains. Hong Kong stocks are increasingly correlated with China’s onshore markets, with mainland buying accounting for more than a fifth of daily transactions on the city’s exchange through the cross-border exchange link programme.

Sentiment was also cautious after a US non-farm payroll report stirred jitters about a worsening labour market. The world’s largest economy’s job additions in August fell significantly short of consensus estimates, triggering a flight to safe assets such as Treasuries and gold and a reversal of gains in stocks.

Investors are gearing up for a week that will bring a bevy of China’s August economic data, which will offer clues on whether the bull run on stocks can be sustained. Inflation data is due on Wednesday, while the figures on new loans and aggregate financing will be out anytime in the following week.

Yi Huiman, former chairman of the China Securities Regulatory Commission, is being investigated by the Communist Party for severe breaches of discipline, the Central Commission for Discipline Inspection said over the weekend. Yi was in charge of the world’s second-largest stock market from January 2019 to February 2024.