Hong Kong stocks surge on China zero-Covid rumours

HONG KONG: Hong Kong stocks rallied more than six percent Tuesday after a post on social media suggested Chinese officials were forming a committee to discuss rolling back some of the country’s economically painful zero-Covid policies.

The appearance of the unverified document ramped up hopes that the world’s number two economy could begin opening up again and ease back on the strict containment measures that have seen millions under lockdown, hammering productivity.

However, Chinese state media nor government officials have suggested that the meeting actually took place, or that such a committee was established, raising questions about the veracity of the statement.

The Hang Seng Index jumped 6.08 percent, or 892.64 points, to 15,579.66 in the afternoon.

The Shanghai Composite Index climbed 2.62 percent, or 75.72 points, to 2,969.20, while the Shenzhen Composite Index on China’s second exchange surged 2.97 percent, or 55.94 points, to 1,942.36.

The post added to a rally already taking place in Hong Kong and across Asia as investors await the Fed’s announcement on Wednesday, with hopes it will hint at a slowdown in the pace of rate hikes.

Tech firms were among the biggest winners — led by Alibaba. Meituan and Tencent — after a hefty sell-off saw some of the market’s biggest firms plunge this year.

Firms linked to travel were also boosted, with Macau casinos Wynn Macau and Melco piling on more than 10 percent while Cathay Pacific jumped more than two percent and Air China was around eight percent higher.

“I think the market’s reaction shows how much anticipation there has been for the reopening in the market,” Hao Hong at Grow Investment Group said.