Alibaba is soaring after the US denied it is weighing limits on China listings on American stock exchanges
- Alibaba, JD.com, and other US-listed Chinese companies are soaring after the Trump administration denied it is considering blocking Chinese firms from listing on American exchanges.
- On Friday, Bloomberg reported that the Trump administration was in talks about a possibly halting to Chinese investment from the US.
- Bloomberg's report said the Trump administration discussed limits to the amount of money flowing into China from the US.
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Alibaba, JD.com and other Chinese firms are soaring on Monday after the US downplayed a Bloomberg report that it was considering stopping Chinese firms from listing on US stock exchanges.
Alibaba, which is listed on the New York Stock Exchange, was up 2% in opening trading in New York and JD.com, listed on the Nasdaq, was up 2.8%.
Chinese firms fell sharply on Friday after Bloomberg reported that the Trump administration was considering plans to limit the amount of cash flowing into China.
Alibaba plunged 5.2%, while JD.com fell 6% on the news, as the S&P 500 dropped 0.5%.
Following Bloomberg's story, the Trump administration issued a statement to Bloomberg in an email partially denying the reporting.
"The administration is not contemplating blocking Chinese companies from listing shares on US stock exchanges at this time," Treasury spokeswoman Monica Crowley said to Bloomberg.
Crowley, a spokesperson from Steven Mnuchin's office, did not add anything more on whether inflows into China would be limited.
Traders have been quick to analyze the statement.
"'The administration is not contemplating blocking Chinese companies from listing shares on US stock exchanges at this time. The implicit warning from this statement is obvious," Neil Wilson, chief market analyst at Markets.com, said in an emailed note. The bold emphasis was added by Wilson.
"This fits into the playbook of Trump negotiations - float something to ramp pressure, and get a reaction. Always put the opposition on the back foot," Wilson said.
"Refuted or not, the implication of this is two-fold: first that the trade/tech war is spiralling ever wider in its scope; secondly it does not bode especially well for the high-level talks due to restart" on October 10, Wilson added.
Markets Insider reporter Ben Winck wrote that the possible actions from the US included: delisting Chinese companies from American exchanges, restricting US government pension exposure to Chinese companies, and enacting limits on Chinese companies that are in indexes managed by US financial firms.