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Chinese stocks listed in the U.S. are trading sharply higher in pre-open Tuesday to reflect strong gains recorded in the Asian trading session. The Hang Seng Tech index soared 7.3% to push its 3-day gains to about 20%.
The risk-on rally was fueled by a warmer U.S.-China relationship after the Xi-Biden meeting. Moreover, investors are expecting from China government to boost stimulus measures and relax COVID restrictions to support the struggling economy.
“Xi gov’t is clearly pivoting economically and attempting to address the two biggest overhangs (by far) on growth: COVID and property. China will proceed cautiously and slowly, so instant gratification won’t be had (especially on COVID), but the policy transition is still important, and sets the stage for outperformance in mainland/Hong Kong equities over the coming months,” Vital Knowledge analysts said in a note.
Hang Seng Index gained 4.1% to see its price trading 25% off the recent lows. This is the highest that Hang Seng Index traded since mid-September. The SSE Composite Index, which tracks all stocks that are traded at the Shanghai Stock Exchange, increased by 1.6%.
As far as individual stocks are concerned, Alibaba (NYSE:BABA) closed over 11% higher in Asia while its U.S.-listed shares are up by over 10% in pre-open Tuesday. Tencent (OTC:TCEHY) closed 10.50% higher while Bilibili (NASDAQ:BILI) shares are trading more than 14% higher in pre-open after Hong Kong-listed shares closed over 15% in the green.
Shares of Taiwan Semiconductor Manufacturing (NYSE:TSM) are up 10% in pre-open on news billionaire investor Warren Buffett added a stake of about $5 billion to its investments in Q3.
