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Chinese stock market awakens

The easing of Covid restrictions, a property market bailout and reduced tensions with the US give investors more hope

The Chinese stock market has shown a surprise rebound, with its key index becoming the world’s best performer in November after months of weak performance triggered by Beijing’s Zero Covid policy, volatile relations with the US, and a property market slump.

The first in-person meeting between US President Joe Biden and his Chinese counterpart Xi Jinping on Monday has added hope for investors after Xi called for better cooperation with the United States.

Although the meeting delivered no dramatic breakthroughs in relations between the world’s two leading economies, experts point to some progress that could be positive for Chinese equities, and lower the risk of delisting of hundreds of Chinese companies such as Alibaba in the US due to audit issues.

“Channels of communication between US-China regulators are crucial to reducing the risk of delisting of China ADRs. Increased engagement should help to mitigate political risk from the US side for Chinese equities,” an analyst at Global X, Dillon Jaghory, told Bloomberg on Tuesday.

READ MORE: Global markets rally as China eases Covid restrictions

Tech shares were the top performers in Hong Kong on Tuesday as well as property stocks, which rallied after Chinese regulators revealed financial measures aimed at helping the sector avoid a credit crunch.

Hong-Kong-listed Chinese tech firms soared 7.3% on Tuesday, lifting the Hang Seng Index, Hong Kong’s benchmark, by more than 4%. The broader Hang Seng China Enterprises Index also gained almost 5%.

The rally comes despite slower economic activity in the country last month, with industrial production below expectations and retail sales contracting for the first time since May.

For more stories on economy & finance visit RT’s business section

https://ift.tt/ZzWM5h0 15, 2022 at 05:39PM
from RT – Daily news

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