Last week we could see new hopes with a break of the downtrend after the prolonged decline of the Chinese stock market. Major problems in the Chinese economy, such as the impending bankruptcy of real estate giant Evergrande and the energy crisis, are likely to affect the country’s future growth rate and result in higher risk and lower expected returns.
A good indicator to judge the situation of the Chinese stock market is the Hang Seng Index. Since the high in February, the index corrected by almost 7500 points to 23700. After this low in early October, we could see a rise to 26132 points. So the Chinese market is recovering, albeit perhaps only in the short term.
Among big Chinese stocks like JD.com, NIO and BYD, BAIDU, the company behind China’s largest search engine, is showing relatively good chart health. The stock hit lows of $133 and $140 in August and early October, and now stands at $177.
The recent rally in the Chinese tech company’s stock could continue with further gains.
Also of interest to the stock price are earnings, which are expected to be released on Nov. 10, 2021.
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