Hong Kong: Stocks surge on China zero-Covid hopes

HONG Kong stocks jumped more than five per cent on Friday (Nov 4), building on a rally this week fuelled by speculation China will begin winding back some of its strict zero-Covid policies.

Reports of progress in US auditing of Chinese firms listed in New York also provided support to traders, easing concerns over a possible delisting of giants such as Alibaba and Tencent.

The Hang Seng Index Soared 5.36 per cent, or 821.65 points, to 16,161.14 – giving it a gain of nearly nine per cent over the week.

The Shanghai Composite Index climbed 2.43 per cent, or 72.99 points, to 3,070.80, while the Shenzhen Composite Index on China’s second exchange gained 2.68 per cent, or 52.78 points, to 2,020.16.

The gains come after an unverified statement earlier this week suggested officials in Beijing had formed a committee to discuss changes to the Covid policy.

A shift away from zero-Covid would provide a much-needed boost to the economy, which has seen growth slashed by a series of lockdowns in the country’s biggest cities, including Shanghai and Beijing.

Hong Kong’s gains were boosted by a rally in tech firms with Alibaba up more than 20 per cent at one point as traders also cheered a report that an inspection of Chinese firms listed in New York showed signs of progress.

The news fuelled hopes that a mass delisting of some of the country’s biggest firms could be avoided.

Around 200 Chinese firms – including Alibaba and fast food conglomerate Yum China – are at risk of being kicked off the New York stock exchange if the inspectors do not sign off on the auditing papers as compliant.

“With so many positive chatters in the market, the indexes are having a relief rally,” Willer Chen, at Forsyth Barr Asia, said.

“A rumour of smooth talks between China-US over audits helped the sentiment as well” alongside growing talks about reopening. AFP