JPMorgan upgraded a slew of Chinese internet stocks including Alibaba Group Holding and Tencent Holdings, turning bullish two months after it shocked the market by branding the sector “uninvestable”. Chinese technology stocks soared on Tuesday after the US investment bank said regulatory clarity had started to emerge, providing some much-needed certainty and reducing risk. The new-found optimism represents a big change of heart. In March, JPMorgan said geopolitical and macro risks had made the sector “uninvestable” in the next six to 12 months. The scathing description sparked one of the wildest swings in recent local market history before reports emerged that the word had in fact been published in error. “Significant uncertainties facing the [internet] sector should begin to abate on the back of recent regulatory announcements ,” said analysts including Alex Yao in a report on Monday. “We had originally forecast that these various uncertainties would continue for six to 12 months, with the earliest relief possible in [the second half of the year].” Yao’s team raised the year-end price targets of 18 Chinese tech companies, including Alibaba, Tencent and Meituan. Chinese internet stocks have emerged from an “unattractive” phase after a spate of endorsements from Beijing. The dramatic downgrade in March came as heightened regulatory uncertainty, the delisting risk faced by US-listed Chinese stocks, geopolitical upheaval and a weakening macro outlook warranted a “very cautious view”. Since then, such risks have diminished and regulatory clarity has emerged, Yao said, as reflected by a 34 per cent rally since March 15 in the 22 internet stocks JPMorgan covers. Beijing voiced support for measures that would assist the “healthy development” of the platform economy at the latest Politburo meeting on April 29, raising hopes of some relief for Chinese tech companies battered by an 18-month regulatory storm. “These announcements came earlier than we expected,” the team said in the report. “After the meeting, a number of financial regulatory bodies announced follow-up policies, further boosting market sentiment.” Bloomberg, citing people familiar with the matter, reported that the word “uninvestable” was published in error and was supposed to be removed from the March report. The Hang Seng Tech Index lost US$248 billion of market value on March 14 and 15, the days following the publication. Tuesday’s bullish report sent tech shares soaring in Hong Kong. The Hang Seng Tech Index gained 5.8 per cent, its biggest gain in two weeks. Alibaba Group Holding surged 7 per cent to HK$90.55 and Tencent strengthened 5.3 per cent to HK$368.40. Meituan and JD.com gained at least 6.2 per cent. Alibaba, Tencent and Meituan received an upgrade from “underweight” to “overweight”. The JPMorgan team raised its year-end price target for Alibaba from HK$75 to HK$130 in Hong Kong and its US depositary shares to US$130 from US$75. It raised the price target for Tencent to HK$470 from HK$265.