(Bloomberg) – Chinese stocks in the US rose sharply in pre-market trading on Friday after Beijing’s top leadership promised more incentives to save an economy hampered by a prolonged blockade of Covid in major cities.
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E-commerce giant JD.com Inc. was among the biggest gains in the group, growing by as much as 17%. Peers Alibaba Group Holding Ltd. and Pinduoduo Inc. increased by 13%. The jump in US depositary receipts came after a 10% rise in the Hang Seng Tech Index, its best one-day performance since Beijing pledged to stabilize financial markets on March 16.
Bets to alleviate repression by stimulating a dizzying leap in Chinese technical action
The Politburo of the Chinese Communist Party has vowed to achieve economic goals and support the healthy growth of Internet platform companies, according to a statement after a three-month economic meeting chaired by President Xi Jinping. Officials pledged to speed up the implementation of support measures, including tax and fee cuts, while adhering to the Covid Zero policy.
China’s Politburo ignites market rally with promises of growth, Tech
“The market is excited about the current headlines, but to see this rally continue, we need to move from the talks to the walk,” said Sharif Farha, portfolio manager at Safehouse Capital, in an e-mail comment. “Investors are looking for an excuse to buy Chinese technology, so it’s up to Chinese politicians to give it to them.
Vital Knowledge founder Adam Chrysafouli said in a note that the language in the Chinese government’s latest promise “sounded very similar” to the latter in March. “But Beijing never followed in the interim with much action. Covid outbreaks in major Chinese cities are more significant for markets, he said, showing some signs of stabilization in the capital and Shanghai.
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Speculation that the authorities could ease the annual regulatory crackdown on technology companies during an upcoming meeting has also helped boost risk sentiment. Bloomberg, meanwhile, said Beijing was discussing with US regulators the logistics of allowing on-site audits of Chinese-registered Chinese companies in a bid to hold most of those stocks on US stock exchanges.
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