Hong Kong’s Hang Seng index had its best day since the financial crisis, gaining 9.1 per cent on Wednesday as markets across the Asia-Pacific region rallied in response to new measures from Beijing to boost investor confidence.
China’s State Council pledged to step up support for financial markets and the ailing real estate sector, vowing to “boost the economy in the first quarter”. The government also said it would speed up the process of regulating big tech platforms, according to a summary of the meeting published by Xinhua, China’s official news agency.
The Hang Seng index had its best day since October 2008 after a sell-off of 21.3 per cent this year, while the Hang Seng Tech index gained 22.2 per cent. Shares in Tencent and ecommerce group JD.com added 23.2 per cent and 35.6 per cent respectively. Alibaba closed 27.3 per cent higher after falling for five consecutive sessions.
The stocks had suffered heavy losses over a three-session sell-off that saw the Hang Seng Tech index drop 21.7 per cent. The declines happened after the US Securities and Exchange Commission said last week that five Chinese companies could be delisted if they do not hand over detailed audit documents that back their financial statements.
China’s CSI 300 closed up 4.3 per cent. Elsewhere in Asia, Australia’s S&P/ASX 200 gained 1.1 per cent in morning trading, while Japan’s Topix and South Korea’s Kospi rose 1.5 per cent and 1.4 per cent respectively.
The moves come ahead of a Federal Open Market Committee meeting that is expected to raise US rates for the first time since 2018, even as the war in Ukraine threatens to exacerbate inflation running at its highest annual rate in 40 years.
The prospect of new coronavirus restrictions across China, where cases have hit their highest levels since 2020, as well as global inflationary pressures and the war in Ukraine, had disturbed markets, said Jessica Tea, Asia-Pacific investment specialist at BNP Paribas Asset Management.
“That said, there are still some investors who believe that after this big regulatory pressure and US announcement, [Chinese tech stocks] will probably reach a bottom,” she said, explaining that some investors were focusing on the “long-term story”.
Chinese stocks have also been weighed down by concerns China would suffer from western sanctions following reports that Beijing had signalled willingness to offer military assistance to Russia.
Additional reporting by Ryan McMorrow in Beijing