Chinese technology stock jumped after two of the country’s largest Internet companies reported sales that exceeded expectations. It overcomes some of the gloom that has descended on the sector as a result of Covid-19 lockdowns and regulatory obstacles.
Bloomberg (May 27, 2022)
On Friday (May 27, 2022), the Hang Seng Tech Index in Hong Kong rose as high as 4.9 percent, the biggest in a week. Alibaba Group and Baidu Inc. were among the biggest gainers, each gaining at least 13 percent.
Both Alibaba and Baidu reported higher-than-expected sales growth. It indicates that some of China’s leading companies have discovered methods to overcome difficult Covid-29 regulations. The revenue beats are an extremely rare, but hopeful indication in an economy that has stalled due to strict limitations.
We do expect our firm’s growth to slow in the second quarter. With the Covid-19 regulations and government policies increasing consumer confidence, we predict that China tech businesses will have easier comps in the September and December quarters.
Ronald Keung, head of Asia Internet research at Goldman Sachs Group Inc
According to a record low in mid-March, the Hang Seng Tech index had brief rebounds. This is because policy optimism attracted dip buyers. However, it is down more than 60% from its top in February 2021. This is because investors struggle to agree on whether the sector is poised for a sustained rally.
On Thursday (May 26, 2022), Chinese corporations trading in the United States rose 7.6 percent. As of 11:23 a.m., Hong Kong’s tech index was up 3.6 percent. However, the benchmark Hang Seng Index was up 2.8 percent. The CSI 300 Index in China rose 0.6 percent.
Nonetheless, traders are concerned that further viral outbreaks and Beijing’s commitment to a Covid-19 Zero policy may roil future market gains. Policy support may also be phased in. Tencent Holdings Ltd. executives warned last week that Beijing’s promises to boost the industry will take time.
Source: Yahoo
Read more: Stocks