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China’s tech stocks gained for a fourth day in Hong Kong as growing signs that the government’s long crackdown on the sector is finally over bolstered investor confidence.
The latest leg of the rally came after Chinese Premier Li Qiang met with senior executives from country’s leading tech firms and urged local governments to provide more support to the enterprises. He asked the companies to support the real economy through innovation and pledged that officials will create a fair environment and reduce compliance costs.
The Hang Seng Tech Index jumped 3.8%, extending the gains to more than 8%. Among the best performers, Bilibili Inc and Kuaishou Technology climbed at least 7.5%. The gains tracked the 3.4% rally in the Nasdaq Golden Dragon China Index.
The comments from Li “signify that the Chinese authorities are turning to mega-cap internet companies as an instrument to pursue industrial policies, create employment, and attempt to tackle choke points in critical technology,†said Redmond Wong, strategist at Saxo Capital Markets HK Ltd.
Chinese regulators imposed more than $1 billion of fines on Ant Group Co and Tencent Holdings Ltd, a move widely interpreted as closure to the regulatory assault that had wiped out billions in market value from the sector in recent years.
Representatives from food delivery platform Meituan and Xiaohongshu Technology Co, a popular Chinese Instagram-like social media platform, also spoke at the meeting with Premier Li, while JD.com Inc and budget shopping platform PDD Holdings Inc submitted written speeches, state broadcaster CCTV reported. The Hang Seng China Enterprises Index, a broader gauge of major mainland companies listed in Hong Kong, climbed 2.6%. Market sentiment has improved after Chinese authorities extended some loan relief measures for property developers.