On Wednesday, Asian stocks performed better compared to losses experienced by Wall Street. The gains were mainly driven by the announcement made by the Chinese tech giant Alibaba stating it would divide into six business groups.
The firm’s objective with this move is to promote market competitiveness and unlock shareholder value. Alibaba is a leading technology company in China, with a broad range of operations, including cloud computing, e-commerce, logistics, media, entertainment, and artificial intelligence.
By 10 am Wednesday (0200 GMT), the firm’s shares listed on the Hong Kong Stock Exchange had surged by almost 14%. Its New York-listed shares also rose in the previous session.
“Investors could get hyped on the positive side in the short term,” said Willer Chen, senior research analyst at Forsyth Barr Asia.
“Alibaba’s shakeup plan may also lead investors to think of the potential for other tech firms like Tencent to follow suit.”
Tencent, Baidu, and Softbank, which is traded on the Tokyo Stock Exchange and is the largest shareholder in Alibaba, all made gains.
The Hang Seng Index had increased by more than 2% by mid-morning.
The Nikkei 225 index in Tokyo increased by just under 0.5 percentage points, and it also increased in Taipei and Bangkok.
Sydney and Shanghai both reported modest gains.
In spite of a better-than-expected reading on consumer confidence, US stock indices ended the day slightly lower on Tuesday after a flat day on European stock exchanges.
The closely watched consumer confidence index increased in March to 104.2 from 103.4 last month, The Conference Board said in a statement.
