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Chinese tech companies rocket as politburo hints at letup in crippling crackdown

The Hang Seng Tech Index jumped as much as 11 percent in Hong Kong, the most since March 17. Shares of Chinese tech firms rocketed in Hong Kong, with JD.com and Alibaba rising around 15 percent, while Tencent shares jumped 11 percent.

April 29, 2022 / 01:28 PM IST

Shares of major Chinese tech companies soared on Friday after a meeting in which top officials called for the "healthy development" of the sector, fuelling hope among investors that a damaging state crackdown may ease.

The Hang Seng Tech Index jumped as much as 11 percent in Hong Kong, the most since March 17. Shares of Chinese tech firms rocketed in Hong Kong, with JD.com and Alibaba rising around 15 percent, while Tencent shares jumped 11 percent.

Beijing embarked on a sweeping clampdown over the past year that has clipped the wings of its biggest internet firms.

But in a meeting of the government's decision-making body on Friday, officials concluded it was "necessary to promote the healthy development of the platform economy" and "complete its rectification", according to the official Xinhua news agency.

In the Politburo meeting, chaired by President Xi Jinping, officials also said there was a need to "respond to market concerns in a timely manner", Xinhua reported.

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"Stocks are oversold and there is speculation of the potential end to the crackdown on these companies," said Justin Tang, head of research at United First Partners, told Bloomberg News.

China's top officials also pledged efforts to meet economic targets -- a signal that authorities could increase stimulus, with economic activity battered by harsh COVID-19 controls to try and stamp out outbreaks in key cities.

On Friday, leaders also stressed the need to "effectively manage and control key risks," and push for the stable and healthy development of the real estate market, Xinhua said.

Beijing has been working to boost confidence in the economy and reassure markets in a series of recent statements.

But analysts caution that China's strict anti-virus measures -- which have snarled travel and supply chains -- could still hamper the announced support measures.

(With inputs from AFP)



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Moneycontrol News
first published: Apr 29, 2022 01:22 pm
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