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Alibaba, Meituan surge 16 per cent to fuel stock rally in Hong Kong as China mulls halting tech crackdown amid economic crisis
- The Hang Seng Index surges 4 per cent, paring the monthly loss to 4.1 per cent, amid signs policymakers are worried about lockdowns, manufacturing slump
- The Shanghai Composite Index, Asia’s worst performer, rebounds after facing the biggest sell-off since 2016
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Alibaba and Meituan fuelled Hong Kong’s best stock rally in a month as China prepares to end a crackdown on tech companies, potentially ending a multi-month, trillion-dollar slump. The Communist Party also vowed to use new tools to support the pandemic-hit economy.
The Hang Seng Index surged 4 per cent to 21,089.39 at the close, narrowing the loss in April to 4.1 per cent. The Tech Index soared 10 per cent, with Alibaba and Meituan surging by 16 per cent in the hottest rallies since a rebound from a mid-March sell-off.
The Shanghai Composite Index added 2.4 per cent, as the party’s 25-member Politburo vowed on Friday to speed up tax cuts and supportive policies, as well as the use of new monetary policy tools and effective investment. The gauge fell 6.3 per cent for the month, the most since a sell-off in January.
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“It’s a strong signal that Beijing needs the big tech companies to revive economic growth,” said Dai Ming, a fund manager at Huichen Asset Management in Shanghai. “How much of those [market-cap] losses will be recovered will depend on them returning to high-growth earnings phase.”
China is expected to have a symposium with the country’s Big Tech on the heels of the Politburo meeting on Friday, raising hopes Beijing will halt its sweeping regulatory clampdown and give internet platforms bigger roles to prop up the ailing economy, two sources briefed on the situation told the Post.
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