Chinese- and Hong Kong-listed stocks soared on Wednesday after China’s government pledged to support beleaguered markets.
The Hang Seng HSI, 5.79% surged 9% as state-run Xinhua News Agency said the government would take a number of market-friendly steps.
The Shanghai Composite SHCOMP, 2.59% rose 3.5%.
China’s financial stability and development committee called for monetary policy to support the economy, and that authorities should prudently introduce policies that have a contractionary impact.
The Chinese government also is working with U.S. authorities to support listings overseas, as the Securities and Exchange Commission last week identified Chinese companies that could be delisted over the issue of auditor access.
JD.com 9618, 11.02% JD, +39.36% jumped 36%, Alibaba 9988, 10.14% BABA, +36.76% rallied 27% and NetEase 9999, 2.59% NTES, +25.69% surged 23% in Hong Kong trade.
Other Hong Kong tech stars also jumped, including Meituan 3690, 11.71% and Tencent Holdings 700, 5.67%.
The committee also said it would keep Hong Kong’s financial markets stable while enhancing regulatory communications and coordination with Hong Kong regulators.
“Having disappointed markets earlier in the week by not cutting interest rates, China’s state economic policy apparatus is taking significant coordinated steps to support risk sentiment. These include State Council support for overseas listings, engaging with the U.S. on ADRs, and perhaps most importantly, suggesting that regulation of its big tech firms will end soon. There are also promises to step-up support for the real estate sector,” said Stephen Innes, managing partner at SPI Asset Management.
Even with Wednesday’s surge, the Hong Kong index is down 14% this year, compared to the 11% drop for the S&P 500 SPX, +2.24%.