Alibaba share price boosted after solid first quarter numbers
Online giant Alibaba posted better than expected numbers for the latest financial year, giving the share price of the Chinese e-commerce leader a much-needed boost. Alibaba’s share price had come under pressure earlier this week after China announced that it would be place retaliatory trade tariffs on selected U.S imports.
Alibaba’s first quarter results helped to allay market fears that the Chinese domestic economy was starting slow due to the ongoing trade war between the United States and China. Alibaba posted revenue of 93.5 billion during the first quarter of 2019, marking a stunning fifty-one percent increase from the same period a year ago.
Net profit for the first quarter rose to 25.8 billion yuan, which significantly outpaced analysts expectations and was over double the net profit seen during the same period last year. A company spokesman said that ongoing expansion in Chinese e-commerce and Alibaba’s fast-growing cloud computing unit helped to accelerate profits.
Alibaba has been aggressively targeting other emerging market economies in Asia where e-commerce spending is less developed than the United States and European markets. The latest results not only show that Alibaba’s ambitious regional expansion plans are working, but that China’s consumers continue to embrace online spending.
Official data on Wednesday showed that the Chinese economy posted much weaker than expected retail sales and industrial production figures last month, while U.S retail sales also disappointed on Wednesday, as they decline by 0.2 percent on a monthly basis. The softer than expected data for April sparked fears that the Chinese and U.S domestic economies may start to struggle during the second quarter of this year.
BABA.US Daily Mountain Chart | Source: ActivTrader
Alibaba’s share price has staged a strong recovery after failing to its weakest level since late February earlier this week. Technically, the stock remains in an uptrend above its 200-day moving average, with buyers now needing to increase short-term bullish momentum and lift the share price above its 14-day day moving average.
Written by Nathan Batchelor, External Analyst, ActivTrades
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