Economy 2 MIN READ

China stocks surge on Xi-Biden meeting, pro-growth policies

November 15, 2022By Reuters

China stocks closed up for a third straight session on Tuesday, led by semiconductor and internet companies on signs of easing China-US tensions after a meeting between US President Joe Biden and Chinese leader Xi Jinping, while Beijing’s latest supportive steps also lifted sentiment.

** The blue-chip CSI 300 Index ended higher 1.9%, and the Shanghai Composite Index added 1.6%.

** The Hang Seng Index jumped 4.1%, while the Hang Seng China Enterprises Index surged 4.8%.

** A positive sign on the Group of 20 (G20) nations summit was a three-hour meeting between Biden and Xi in which the two leaders pledged more frequent communications despite their many differences.

** Recent moves by Chinese authorities to ease some COVID curbs and provide financial support to the property market also underpinned sentiment.

** Hong Kong-listed tech giants soared 7.3%, sending their month-to-date gains to 33.7%. Index heavyweights Alibaba and Tencent surged more than 10% each.

** “We believe the Xi-Biden meeting today could reduce the risk of Chinese ADRs (American Depositary Receipts) being delisted but is unlikely to reduce the intensity of the tech war,” said Jefferies analysts in a Monday note.

** In mainland markets, semiconductor shares jumped 6.7% and securities firms climbed 3.6%.

** The strong market performance overshadowed concerns over data showing slower Chinese factory output growth and a fall in October retail sales.

** “Economic activities slowed in October due to worsening COVID outbreaks and weak external demand,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “As investors are forward looking, the focus in the market is on the change of policies.”

** Several Chinese cities began cutting routine community COVID-19 testing, days after China announced an easing of some of its coronavirus measures, although daily infections had jumped to the highest level since April, when Shanghai was in a two-month citywide lockdown.

** Separately, China’s central bank partially rolled over maturing medium-term policy loans and kept the interest rate unchanged for a third straight month.



(Reporting by Shanghai Newsroom; Editing by Rashmi Aich and Angus MacSwan)

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