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Chinese tech stocks led gains for Asian equities on Thursday as Beijing boosted stimulus measures to support its pandemic-hit economy.
Hong Kong’s Hang Seng Tech Index rose 1.3 per cent, fuelled by gains in short-video platform Kuaishou, and smaller increases for Alibaba, Tencent and food delivery app Meituan.
The rise highlights a month-long rally in Chinese internet stocks as investors shop for value in a sector hit hard by Beijing’s regulatory crackdown.
China in November forced fintech Ant Group to halt its $37bn initial public offering, while in recent months it has had Didi’s ride-hailing app pulled from online stores, and fined ecommerce group Alibaba a record $2.8bn for violating competition rules.
On Thursday, regulators summoned 11 ride-hailing companies, including Didi and Meituan and told them to come up with detailed plans for overhauling their treatment of workers and customers by the end of the year.
Kuaishou rose more than 6 per cent on news it would join the Stock Connect scheme, allowing mainland Chinese investors to buy its Hong Kong-listed shares.
Hong Kong’s Hang Seng and mainland China’s CSI 300 indices both inched higher in early trading. Japan’s Topix and South Korea’s Kospi fell slightly. The S&P/ASX 200, which tracks Australian stocks, was also down.
The gains came as the prospect of stimulus in China helped tech companies shake off the effects of the regulatory clampdown.
“On the policy front, Chinese Premier Li [Keqiang] held the State Council regular meeting and pledged to increase support for small-and-medium enterprises to counter the impact from elevated commodity prices, resurgent virus spread and flooding,” said Ken Cheung Kin Tai, chief Asian FX strategist at Mizuho Bank.
The People’s Bank of China announced it would provide Rmb300bn ($46.4bn) in low-cost funding for banks. Analysts said the move hints at further support from Beijing, after an independent survey of manufacturing activity showed a contraction in August.
“As evidence of a growth slowdown increases, we think Beijing is inching closer towards stepping up policy support,” said Lu Ting, chief economist at Nomura in Hong Kong. “Keynesians are coming back in Beijing.”
Overnight, the S&P 500 index closed flat after giving up its early gains during afternoon trading in New York. Futures on the index were little changed during Asian trading hours.
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