Rallied Chinese stocks, caution advised despite low valuations, geopolitical risks, regulatory crackdown.

From Dow Jones & Company:

Stocks of beaten-down Chinese companies, including Alibaba, have rallied in the past month with buy signals based on valuations, but caution remains. Hong Kong’s Hang Seng Index gained 2%, Shanghai Composite rose 5%, but Chinese market still struggles. Economic slowdown and regulatory crackdown weigh on stocks despite recent gains and government support. Valuations are low, but caution is advised, especially for tech sector and popular names like Alibaba. Geopolitical risks and U.S.-China relations contribute to wider China risk premium. Corporate earnings must drive stock support, but tech sector faces challenges from high expectations and geopolitical tensions. China’s domestic economy shows momentum, but earnings may not meet expectations, particularly for fast-growing sectors.



Read more at Dow Jones & Company: Alibaba Stock Has Rallied. Why Caution Is Warranted on Chinese Shares.