HONG KONG: Hong Kong stocks rallied more than five percent Tuesday after a post on social media suggested Chinese officials were forming a committee to discuss rolling back some of the country’s economically painful zero-Covid policies.
The appearance of the unverified document ramped up hopes that the world’s number two economy could begin opening up and easing the strict containment measures that have placed millions under lockdown, hammering productivity.
However, neither Chinese state media nor government officials have suggested any meeting actually took place or such a committee was established, raising questions about the veracity of the statement.
The Hang Seng Index surged 5.23 percent, or 768.25 points, to 15,455.27, having risen more than six percent at one point before falling back slightly.
The Shanghai Composite Index climbed 2.62 percent, or 75.72 points, to 2,969.20, while the Shenzhen Composite Index on China’s second exchange surged 2.97 percent, or 55.94 points, to 1,942.36.
The social media post added to a rally already taking place in Hong Kong and across Asia as investors await an announcement by the Federal Reserve on Wednesday, with hopes it will hint at a slowdown in the pace of rate hikes.
Tech firms were among the biggest winners Tuesday after a hefty sell-off saw some of the market’s biggest companies plunge this year, while President Xi Jinping’s tightened grip on power in China has added to fears of another crackdown on the sector.
Hong Kong stocks finish with a loss
Alibaba climbed more than seven percent, while Tencent and Meituan enjoyed double-digit gains.
Firms linked to travel were also boosted, with Macau casinos Wynn Macau, Sands China, MGM China and Melco all piling on more than 10 percent, while Cathay Pacific jumped more than three percent and Air China was more than six percent higher.
“I think the market’s reaction shows how much anticipation there has been for the reopening in the market,” Hao Hong at Grow Investment Group said.
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