Stocks in mainland China and Hong Kong soared more than 4.5% Monday after the Chinese government eased its stringent coronavirus measures further, according to Wall Street Journal. Stocks like Alibaba, Xiaomi, and JD.com, among others, led the gains in the benchmark Hang Seng Index.

Tech and E-Commerce Lead Gains in Chinese Stocks

Chinese authorities announced new steps to ease the stringent zero-Covid policy, sending equities in mainland China and Hong Kong rallying. The benchmark Hang Seng Index rose more than 4.5% Monday, while the CSI 300 Index, which tracks the largest 300 companies in China, is up around 2%.

Some of the best performers of today’s rally were Chinese tech and e-commerce giants such as Xiaomi, JD.com, and Alibaba, rising more than 13%, 11%, and 9%, respectively. Other stocks that jumped on the news of relaxed measures include Tencent, Meituan, Ping An, and Kuaishou Technology, among others.

In contrast, US equities started the week in the red, with S&P 500, Dow Jones, and Nasdaq 100 futures sliding around 0.3%. Meanwhile, the Chinese yuan welcomed the new measures, rising more than 1% against the US dollar.

China’s Economy Could See a Stronger Economic Rebound in 2023, Analyst Says

The gains in Chinese and Hong Kong equities came after Shanghai authorities announced residents are no longer required to show negative PCR test when taking public transport or going inside public outdoor venues. Similarly, Hangzhou, the capital of China’s Zhejiang province, also alleviated some measures.

Investors have been keeping a close eye on potential changes in China’s strict zero-Covid policy, which has been driving away global investments and impeding the country’s economic growth. The rigorous measures resulted in widespread protests in November.

“We have this happy congruence with more and more easing in Covid policy.”

– Redmond Wong, a strategist at Saxo Markets Hong Kong

Wong believes China’s potential reopening could pave the way for a more robust economic rebound in 2023. Meanwhile, Christina Woon, an investment director of Asian equities at Abrdn, thinks that China’s internet and tech companies could be among the biggest beneficiaries if the government continues to ease its Covid-19 measures.

China’s zero-Covid policy has significantly slowed the country’s economic growth in 2022, particularly in the second quarter. Earlier this year, the authorities imposed huge lockdowns in several major cities, such as Shanghai and Wuhan.

This article originally appeared on The Tokenist

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