Chinese tech stocks soar by record in Hong Kong as Beijing pledges support for troubled markets

Hang Seng Index logged best day since October 2008 while the Tech Index rallied by a record since inception in July 2020

A State Council committee pledged to ensure market stability, Xinhua reported, after a rout in offshore Chinese stocks infected onshore markets

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‘Supporting risk sentiment is something that the state apparatus controls,’ Innes at SPI says. Photo: Bloomberg

Published: 10:34am, 16 Mar 2022Updated: 5:15pm, 16 Mar 2022

Hong Kong stocks soared by the most since October 2008 as risk appetite returned after China vowed to ensure market stability. The support drove a record rally in tech stocks from Alibaba to JD.com charted unprecedented 20 per cent-plus gains.

The Hang Seng Index jumped 9.1 per cent to 20,087.50 at the close of Wednesday trading, the biggest advance since a 12.8 per cent surge seen during the post-Lehman crisis more than 13 years ago. The rebound helped claw back much of the US$300 billion destruction on Tuesday when the benchmark slid to a 10-year low.

The Tech Index surged 22 per cent, the most since its July 2020 inception. The China’s Shanghai Composite Index added 3.5 per cent, after losing 8 per cent over two days in the worst sell-off since August 2015.

China pledged to ensure market stability, the state-run Xinhua news agency reported on Wednesday, citing a State Council committee meeting chaired by vice-premier Liu He. It also added that talks with US agencies are progressing on accounting issues involving Chinese companies listed in New York.

JD.com led index gains, appreciating 36 per cent to HK$219.60. Alibaba Group Holding, the owner of this newspaper, climbed 27 per cent from a record-low to HK$90.70 while Tencent Holdings advanced 23 per cent to HK$367. Both Meituan and NetEase added at least 23 per cent.

“These announcements don’t mean much individually, but collectively, they suggest policymakers won’t sit idle, and that asset prices will be supported,” said Stephen Innes, managing partner at SPI Asset Management in Bangkok. “Supporting risk sentiment is something that the state apparatus controls, and that’s precisely what they are doing.”

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