Chinese stocks listed in the US extended gains on Tuesday, as officials vowed to speed up Covid shots for the elderly and to avoid excessive restrictions, fueling a new round of bets that Beijing is bending to pressure for an economic reopening.
(Bloomberg) — Chinese stocks listed in the US extended gains on Tuesday, as officials vowed to speed up Covid shots for the elderly and to avoid excessive restrictions, fueling a new round of bets that Beijing is bending to pressure for an economic reopening.
The Nasdaq Golden Dragon Index surged as much as 6.3%, the most in two weeks, and added to a 2.8% gain on Monday’s session.
E-commerce giants Alibaba Group Holding Ltd. and JD.com Inc. each rose at least 5.4%. Stocks that are set gain strongly from reopening, such as online travel agency Trip.com Group Ltd. and Yum China Holdings Inc., also climbed.
The moves tracked a rally among their Hong Kong peers, with Hang Seng Index higher 5.2%.
Earnings optimism is also buoying the stocks. Bilibili Inc. was the latest to announce better-than-expecting earnings, pushing its shares up as much as 21%.
Pinduoduo Inc. reported results topping analysts estimate on Monday.
China said it will bolster vaccinations among senior citizens in a move seen crucial to reopening, even though the government stopped short of issuing mandates to help raise inoculation rates.
The country’s top health officials also warned against any excessive control measures during a briefing, while saying China is constantly adjusting its Covid policies.
READ: China Pushes Elderly Vaccination as Reopening Pressure Grows
The statements came after protesters took to the streets across China over the weekend in a rare act of defiance against the government and its Covid Zero strategy.
The demonstrations were muted on Monday after authorities deployed a heavy police presence in major cities and localities pared back some Covid restrictions, soothing concerns that a long-lasting protest may prompt a crackdown.
“The direction of reopening is very clear, in our view, and we don’t think the government will double down on pandemic control measures.
Whether China will head into a forced reopening will depend on the Covid situation, but the government still has enough room to maneuver, ” Citigroup analysts including Xiangrong Yu wrote in a note to clients.
The reopening will gain momentum post the National People’s Congress next March, the note said.
The benchmark of US-listed China stocks is up 23% in November, heading for its biggest monthly gain on the record after a historic rout in October.
A slew of recalibration of Covid Zero policy, more supportive measures for the property sector as well as audit inspection progress spurred optimism among investors, though the group was still gripped by volatility and jitters swayed by surge in Covid infections.
(Updates shares, chart at the open, adds analyst comments in the sixth paragraph and details throughout)
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