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HomeMarketChina stocks skyrocket as Hong Kong relaxes some COVID curbs By Investing.com

China stocks skyrocket as Hong Kong relaxes some COVID curbs By Investing.com

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By Ambar Warrick 

Investing.com– Chinese stocks rallied on Friday, while the Hang Seng index surged 6% after the Hong Kong government relaxed some COVID-related curbs, driving optimism over a broader withdrawal of restrictions.

China’s bluechip index jumped 2.1%, while the index rose 1.5%. Hong Kong’s was by far the biggest gainer, surging to a one-month high. Chinese bourses recouped all of their losses this week, while the Hang Seng was set to rise more than 5% for the week. 

The Hong Kong government said on Thursday that it plans to ease COVID-19 restrictions next week by allowing international arrivals to travel around the city. The easing will be part of relaxation to a vaccine pass requirement that will also free up movement for residents. 

The move comes as the government adopted new rules based on lower transmission risks due to masks, and also as public hospitals returned to full service. But the city still has some checks on tracking the movement of individuals, and still regards the COVID-19 pandemic as a “public health emergency.” 

Thursday’s move marks the first major relaxation in COVID-19 curbs by the city after it saw its worst ever outbreak earlier this year. The move also comes amid speculation that China also plans to scale back strict anti-COVID curbs in the near-term. 

Hong Kong and Chinese stocks had rallied sharply last week on those hopes, which were also fed by unsubstantiated rumors on social media. But Beijing denied that a relaxation of its strict zero-COVID policy was in the works.

The policy is at the heart of China’s economic slowdown this year, and has also caused steep losses in Chinese equities.

Goldman Sachs analysts forecast that Chinese stocks could see a 20% rally when the country does eventually withdraw zero-COVID, and that it could do so by mid-2023. But Beijing has given no such indication.

Chinese stocks were also buoyed on Friday by softer-than-expected U.S. inflation data, which spared a rally across risk-driven markets. 

 

Story Credit: investing.com

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