SHANGHAI: Hong Kong stocks jumped the most in six weeks, and Chinese shares rose on Friday after authorities vowed at a top-level meeting to step up policy support to stabilise the economy and financial markets hit by domestic COVID-19 outbreaks and rising geopolitical risks.
Tech giants trading in Hong Kong led gains with a 10% jump, amid hopes that Beijing will stop its sweeping regulatory clampdown on the embattled sector.
The blue-chip CSI300 Index rose 2.4%, to 4,016.24, while the Shanghai Composite Index gained 2.4% to 3,047.06 points.
Still, the CSI300 Index and Shanghai Composite Index have lost 4.9% and 6.3% for April, respectively, as China’s worst COVID-19 outbreak since Wuhan in 2020 and its zero-COVID policy clouded growth prospects.
Investor sentiment was further dampened by authorities’ reluctance to roll out more stimulus in April.
China’s yuan also rebounded on Friday, recovering intraday losses as market sentiment improved after the meeting, with the onshore yuan bouncing from a 1-1/2-year low of 6.6520 per dollar to finish domestic trading at 6.5866 per dollar, up 389 pips or 0.6% from the previous late night close of 6.6255.
China will strive to keep economic growth within a reasonable range, achieve social and economic targets for 2022 and preserve the stable operations of capital markets, state media said, citing a meeting of the Politburo, a top decision-making body of the ruling Communist Party.
The meeting, chaired by President Xi Jinping, also said China would roll out measures to support healthy development of the platform economy and property market.
“The market reacted positively in line with the policy direction, but we do not expect the rise to be sustainable,” said Dan Wang, chief economist at Hang Seng Bank China.
“The Politburo meeting did not propose any new measures that were not previously announced,” Wang said. “Policies outlined suggest that the government and the state sector will play a decisive role in the economy, leaving the market and private sector little room to manoeuvre.” The Politburo maintained its stance on the zero-COVID policy to control coronavirus outbreaks while minimizing the impact on the economy, state media said.
“Authorities are balancing the impossible tasks of maintaining dynamic zero policy and stabilising growth. What stands out is further relaxation of housing policy and stimulating consumption,” Hang Seng’s Wang said.
The strict anti-virus policy, which analysts say should be adjusted to help revive economic growth, has placed residents in the financial and commercial hub of Shanghai under a prolonged one-month lockdown, disrupted supply chains and disturbed economic activities across the world’s second largest economy.