HONG KONG: Shares in Hong Kong and mainland China soared Tuesday as Beijing ramped up efforts to bolster the country’s battered markets.
The two bourses are among the world’s worst-performing in 2024 as traders fret over ongoing weakness in the world’s number two economy, particularly the colossal property sector, as well as government crackdowns on various industries including tech.
China’s leadership has become increasingly worried about the sell-off, which has wiped trillions off valuations, and have unveiled a string of measures to try to staunch the rout.
The Hang Seng Index in Hong Kong jumped 3.15 percent, or 487.98 points, to 15,997.99.
The Shanghai Composite Index climbed 2.26 percent, or 61.08 points, to 2,763.26, and the Shenzhen Composite Index on China’s second exchange rallied 3.56 percent, or 51.00 points to 1,484.11.
The advance in Hong Kong was largely helped by a surge in market heavyweight tech firms including Alibaba, JD.com and XD Inc.
On Tuesday, Central Huijin Investment, the unit that holds Chinese government stakes in big financial institutions, said it would increase its exchange-traded fund holdings.
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That was followed by the China Securities Regulatory Commission saying it would urge more action from long-term funds and call on listed firms to ramp up repurchases, while Bloomberg reported President Xi Jinping would meet officials to discuss the market’s dire performance.
The developments came after officials on Sunday pledged to provide support to avoid wild fluctuations.
“Huijin’s announcement will guide and encourage more funds to buy and also confirms the market speculation on more state buying recently,” said Zhou Nan, at Long Hui Fund Management.
“There’s very limited room for further slide but the market may continue to fluctuate before the bottom can be solidified.”
However, analysts have warned that while such moves could provide some short-term relief, the government needed to address long-standing problems within the economy – particularly the property sector – to restore confidence.
“Right now the market is looking for clearer signals on the economic recovery,” said JPMorgan Asset Management’s Marcella Chow.
“Expectations remain quite low - markets and investors are still grappling with the weak economic recovery,” she told Bloomberg News.
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