(Bloomberg) – Hong Kong shares face a volatile opening Tuesday as traders return from the holiday and weigh the viability of China’s policy efforts to rescue a slumping economy and sentiment.
Most read by Bloomberg
Tech stocks could see a surge in trading volume after a media report said Beijing is planning a meeting with big tech companies to ensure an end to the crackdown. The rise in shares could be offset after another report that the Chinese government may require some of its biggest tech companies to offer the state 1% of shares.
Stocks across Hong Kong and China rallied on Friday, with a gauge for tech stocks rising 10% as traders cheered statements of support from the Politburo. But that optimism will be tested as recent developments cloud the outlook again, including a slowdown in Chinese activity and a tightening of Beijing’s Covid-19 restrictions.
The market’s reaction to tech news “really depends on how much government gets involved in the management of the company, but overall it’s positive that they’re calibrating their approach in response to the current situation,” said Justin Tang, who Head of Asia Research at United First Partners in Singapore.
READ: Bets on crackdown easing lead to dizzying rise in Chinese tech stocks
Beijing is deploying an increasingly stringent playbook to contain its nascent Covid-19 outbreak, from repeat testing of most residents to blocking access to public places without a negative result. Mainland financial markets will remain closed through Wednesday for the Labor Day holiday.
The Nasdaq Golden Dragon China Index rose 2.4% on Monday. The Hang Seng Index and Hang Seng Tech Index both rose four straight weeks last week, including a rise on Friday on bets on the end of China’s government crackdown.
The story goes on
Most Read by Bloomberg Businessweek
©2022 Bloomberg LP
Comments are closed.