(Bloomberg) — Chinese technology shares listed in Hong Kong rose for a second day, as traders rushed to unwind short bets ahead of the year-end holidays.
The Hang Seng Tech Index added as much as 2.5%, extending a rebound from oversold territory. The rise followed a 7% advance in the Nasdaq Golden Dragon China Index overnight, its steepest jump since Aug. 24.
Shares of China’s biggest live-streaming and e-commerce platforms advanced after being battered the previous day due to an unprecedented tax evasion fine the government imposed on a top online influencer. Bilibili Inc. climbed as much as 8.3%, the most since Nov. 2, while Kuaishou Technology, Alibaba Group Holding Ltd., and JD.com Inc. each gained at least 5.1%.
The “higher closing in ADRs triggered short-covering in Hong Kong,” said Steven Leung, executive director at UOB Kay Hian in Hong Kong.
After a bitter start to the week, risk appetite has returned to global markets, propped up by hopes that President Joe Biden’s economic agenda could still come through despite Senator Joe Manchin’s rejection. Market swings are also getting exacerbated by lower liquidity ahead of Christmas.
Still some analysts are cautious about the sustainability of the tech rally.
“I don’t think a short term bounce like this is very meaningful in guiding decisions — it’s all sentiment,” said Shi Yifan, a senior analyst at Shenzhen Right Investment Management Co. “There’s no question that they are undervalued, but the outlook is still unclear, so I’m still waiting for the right timing.”
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