Shares of China’s biggest U. S. -listed heavyweights rose on Wednesday after news broke that China’s output sector grew at the fastest speed in more than a decade last month, adding more than $25 billion in the market price on hopes the domestic economy will recover. induced by confinement more temporarily than expected.
Although the market as a whole fell on Wednesday, Tencent’s shares rose nearly 6 percent, posting what could be the biggest one-day gain in more than 3 months, while Hong Kong’s Hang Seng Index posted its biggest percentage gain since December, more than four percent.
Triggering the morning rally, China’s National Bureau of Statistics reported that the country’s purchasing managers’ index, which measures the fitness of the production sector, rose to 52. 6 in February from 50. 1 in January, beating analysts’ expectations of 50. 5 and marking the point since April. . 2022.
The gain indicates that China’s post-pandemic recovery, which has long been hit by continued Covid lockdowns that ushered in the economy’s second-worst performance since 1976 last year, is gaining momentum, says Tom Essaye, an analyst at Sevens Report, noting that the knowledge helped drive optimism in global markets on Wednesday.
The rally is widespread, with each of the country’s ten largest stocks traded in the U. S. U. S. Rising on Wednesday, collectively gaining more than $25 billion in market value, with fast-food company Yum China, web giant Baidu and biotech company Beigene up 3. 5%, 4% and 7%. respectively.
Among the biggest gainers are e-commerce monolith Alibaba and gaming company Pinduoduo, which added more than $7 billion and $6 billion in Array.
The Nasdaq Golden Dragon China Index, which tracks U. S. -listed Chinese companies, jumped 4% on Wednesday, wiping out losses from a 15% drop since last January. The rate has plunged more than 30% since the pandemic began. however, it has risen more than 50% from the depths driven by the lockdown expired last year, when record waves of Covid delayed China’s economy.
Chinese stocks have lost large amounts of price since Beijing officials issued a series of sweeping regulations for the personal sector in 2021, and then faced waves of covid infections that intensified last year. However, analysts have since begun to be positive about the world’s second-largest economy. “There are pent-up economies, there is pent-up demand, so we think China will experience very strong growth, especially as it comes later in the year,” said Douglas Peterson, president of S.
“We think the market is underestimating the deep ramifications of [China’s] reopening and the option that a physically powerful cyclical recovery could occur,” said Laura Wang of Morgan Stanley, who expects the country’s economy to grow 5. 7% this year, above average. expectations of around 5%.
Chinese stocks $70 billion as Ant Group’s new $1. 5 billion plan fuels investor optimism (Forbes)