U.S.-listed Chinese stocks soared the most since at least 2001 after Beijing vowed to keep its stock market stable, halting a sharp selloff that saw the shares erase over $200 billion in value in just three days.

The Nasdaq Golden Dragon China Index jumped 33% Wednesday after officials promised to ease a regulatory crackdown and support property and technology companies. Alibaba Group Holding Ltd. rallied 37% in its biggest gain since its trading debut in September 2014, adding $76.5 billion in market value -- and matching the amount it added on the day it started trading in New York. JD.com Inc. and Didi Global Inc. each gained at least 39%.

The turnaround comes after investors have been split on the fate of Chinese stocks. While analysts at JPMorgan Chase & Co. said that some Chinese Internet names have turned “uninvestable” in the short term, others said the recent selloff was overdone.

“What we saw today is the regulatory risk premiums going away,” said Olivier d’Assier, head of Asia Pacific applied research at Qontigo. “Regulatory risk was the biggest worry for investors and they are right now breathing a sigh of relief on Beijing’s speech.”

“However, it still leaves the geopolitical risk out there, that’s something that has to play out but that usually takes a little bit longer,” he said.

Shares in live-streaming platform operator Bilibili Inc., which said on Wednesday it plans to pursue conversion to a dual-primary listing on the Hong Kong Stock Exchange, jumped 48%, the most on record. China-linked exchange-traded funds soared too, with the KraneShares CSI China Internet Fund gaining 40% and the Invesco China Technology ETF up 26%.

“We see some long-only funds starting to search for bargains, and it’s very distinct over those companies who can do a dual listing and those who cannot,” said Sean Darby, chief global equity strategist at Jefferies.

Under Pressure

Chinese stocks in the U.S. saw renewed weakness last week after the U.S. Securities and Exchange Commission identified five Chinese companies that could be subject to delisting. On Wednesday, U.S. Senators Marco Rubio and Chris Van Hollen reiterated that the companies must comply fully with American rules if they want to keep trading on New York exchanges.

“Americans are investing money in companies which don’t have the transparency that you would expect from other investments, virtually from any company from virtually any part of the world,” Rubio, a Florida Republican said in an interview. If U.S. and Chinese officials strike a compromise that allows companies to maintain their listings, the deal shouldn’t allow “enormous loopholes that make it meaningless,” he added.

How U.S. Is Moving Closer to Delisting Chinese Firms: QuickTake

China is preparing to make a concession on disclosing Chinese audit information amid efforts to resolve the perceived impasse threatening U.S.-listed Chinese firms, The Financial Times reported, citing three people familiar with the matter.

The prospect of sanctions for China amid Beijing’s relationship with Russia and a lockdown in tech hub Shenzhen have also weighed on sentiment.

Reach more: China Investors Need More Than Words to Find Faith in Markets

Despite Wednesday’s historic rally, the Nasdaq Golden Dragon China Index is still down about 65% since it’s peak in February 2021. Shares of tech giants are also closer to their lows with Alibaba down about 67% from its high in 2020 and Baidu Inc. about 56% lower.

“There were plenty of encouraging messages, but markets will be looking for action such as rate cuts, more fiscal spending, and easing regulations, to follow words otherwise the selling pressure may resume,” Mitul Kotecha, chief emerging Asia and Europe strategist at TD Securities, said.

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