US-listed Chinese stocks mostly higher on Tuesday amid optimism around Beijing’s decision to drop COVID-19 quarantine rules for domestic tourists, as the world’s second largest economy give up their longstanding “COVID Zero” policy.
But shares of electric vehicle makers like Tesla (TSLA) and Apple’s drop (AAPL) stocks show that it is still unclear about the negative effects from the Chinese economy.
And this mixed reaction to Chinese stocks shows that investors are all optimistic about what the future has in store for doing business in China, while acknowledging the damage already caused by the pandemic. . major COVID-19 outbreak hit the country in the past month.
Share of the Chinese social network Weibo (WB) rose as much as 9% on Tuesday, while shares of Alibaba (TORTOISE), JD.com (JD) and Tencent (TCEHY) all increased by more than 3%.
Outside of China’s consumer internet name, stocks like Wynn Resorts (WYNN) and Las Vegas Sands (LVS) has increased by more than 4%. Shares of Melco Resorts (MLCO) rose more than 8% on optimism for Macau’s gambling sector after a challenging few years.
Crude was also 1.5% higher on Tuesday, with WTI crude trading above $80 a barrel for the first time in three weeks amid hopes of global demand picking up as China’s economy opens up. back strong.
Apple shares, on the other hand, fell as much as 1.5% on Tuesday, near lowest level since June 2021 as concerns remain about the company’s ability to keep up with iPhone demand amid production disruptions in China.
Tesla shares fell more than 8% on Tuesday after it was reported that production at its Shanghai factory had been suspended earlier than previously expected. January production is also set to decrease.
Shares of Chinese electric car maker Nio (NIO) has also decreased by more than 8% after the company said early on Tuesday it cut its fourth-quarter delivery forecast due to disruptions related to China’s COVID-19 outbreak.
Of course, for all of these companies, there is more to the story than a headline about the loosened COVID rules in China.
China’s consumer internet name has been one of the stocks hit hardest since early 2021 due to investor pessimism about the Federal Reserve’s response to inflation — i.e. interest rates. significantly higher — established. The recent rally of these names is descending from peak to trough. down 70% at the beginning of this year.
In contrast, Apple has held up better in 2022 than large-cap companies like Microsoft (MSFT), Alphabet (GOOGLE), Amazon (AMZN) and Meta Platform (META). In a year when higher interest rates challenge valuations and economic concerns weigh on even the biggest companies in the market, Apple has become a safe haven for investors. As a year ended with much anxiety for US investors, Apple has also been sensitive to headlines around its flagship product offering.
But Tuesday’s market reaction opens the door to what appears to be the main market storyline in early 2023, which is growth optimism in China mixed with caution about The pandemic is still raging in this country.
Click here for the latest stock market news and in-depth analysis, including stock-moving events
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, flip chart, LinkedInand YouTube
