Chinese stocks in Hong Kong headed for their best week since 2015, driven by reopening speculation and a surge in technology shares.
(Bloomberg) — Chinese stocks in Hong Kong headed for their best week since 2015, driven by reopening speculation and a surge in technology shares.
A gauge of the nation’s equities listed in the city jumped more than 6% in Friday’s session. It is up about 10% for the week after unverified social media posts circulated earlier that a committee was being formed to assess scenarios on how to exit Covid Zero. The Hang Seng Tech Index rallied over 8% on Friday.
Rumor mills have infused strong optimism this week in embattled China markets, where traders have been seeking reasons to scoop up shares in one of the world’s worst-performing major markets. Stocks have rallied even as authorities have given no indication of a change in their stance on Covid Zero.
“There is still a tug of war going on between bulls and bears, bottom feeders and weary investors,” said Justin Tang, head of Asian research at United First Partners. “It will continue in the short term until we get a clearer idea whether there will be more pro-market policies under the new leadership.”
Equities resumed gains on Friday after falling in the previous session as China’s top health body reiterated its commitment to the Covid Zero policy. On the mainland, the benchmark CSI 300 Index has jumped more than 5% this week, on track for the largest gain since early 2021.
Alibaba Group Holding Ltd. rallied more than 12% to be the biggest contributor to gains on the Hang Seng China gauge Friday. Tencent Holdings Ltd. soared 10%.
“Market dynamics remain relatively subdued despite some short-lived excitement over chatter around Covid-Zero policy changes,” Morgan Stanley strategists including Laura Wang wrote in a note. “We expect near-term market volatility to stay high with complexity around Covid relaxation and potential policy vacuum ahead of the Central Economic Work Conference.”
READ: Key Meetings to Offer Clues on China’s Economic Path Forward
–With assistance from Abhishek Vishnoi.
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