The positive comments from Chinese officials, which indicated that a regulatory crackdown would ease, led to double-digit stock growth at Alibaba, Baidu and JD.com. Other stocks that soared on the news included Pinduoduo (PDD), Bilibili (BILI) and Tencent Holdings (TCEHY).
China officials also said they planned to support overseas stock listings and build stability in capital markets.
That fueled the best growth in these stocks since 2008, but then the rally fizzled.
Plunge In Chinese Stocks
And once the jubilation ended, the stocks started plunging again Monday. Alibaba stock dropped 4.4%%, closing at 103.59 on the stock market today. JD.com stock sank 5.7% to 61.44, while Baidu lost 1.6% to 146.68.
In addition, Pinduoduo fell 6.1% to 39.99, Bilibili dropped 9.6% to 24.91 and Tencent Holdings had not yet officially but was down 7.1% to 48.01.
This past year has been a horrible time for holders of Chinese stocks. Many of the large internet stocks saw their market value cut in half over the past 12 months.
The stocks repeatedly took a beating due largely to regulations, Covid-19 fears and macroeconomic concerns.
Analysts pointed to three main drivers for the reversal. First, there are renewed concerns over potential de-listings for Chinese shares trading in New York.
Further, a resurgence in Covid-19 cases is taking place in major mainland cities. Finally, concerns persist over the possibility of China providing support to Russia in its invasion of Ukraine.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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