Investors jumped on the prospect of thawing U.S.-China relations.
Lintao Zhang/Getty Images
Chinese technology stocks surged Thursday, as investor sentiment was buoyed by signs that relations between the U.S. and China would improve.
The sector has been under pressure for much of the year, amid a wider regulatory crackdown on businesses by Beijing and scrutiny in particular on U.S.-listed Chinese tech companies.
Tech giant Alibaba (ticker: BABA) rose 7.3% in Hong Kong, with the U.S.-listed shares up 5.9%. Didi (DIDI), the embattled ride-hailing group that has been a lightning rod for scrutiny on U.S.-listed Chinese tech, rose 3% in New York.
Tech group Tencent (0700.H.K.) climbed 5.6% in Hong Kong, while peer Baidu (BIDU) rose 3.8%, and e-commerce giant JD.com
(JD) lifted 5.2% in New York.
Outperformance by tech stocks helped Hong Kong’s Hang Seng Index climb 3.1% Thursday. The Hang Seng Tech Index rose 5.2%, but remains 44% below highs earlier this year.
The U.S. and China agreed Wednesday that President Joe Biden and President Xi Jinping would meet before the end of the year. It will be a virtual meeting and follows a call between the two leaders that was held in September—that was their first in seven months.
The virtual summit was announced shortly after White House national security adviser Jake Sullivan met a senior Chinese foreign policy advisor, Yang Jiechi, in Zurich, according to The Wall Street Journal.
“While we expect minimal material improvement in the tone or substance of their relationship in the coming months, we still see investment opportunities on both sides, especially in the areas of capital markets, technology, cybersecurity, and climate change,” said strategists led by Mark Haefele, the chief investment officer at UBS Global Wealth Management.
“In our view, investors should avoid taking sides. The best long-term approach is to seek exposure to the different economic cycles, growth opportunities, and sectoral trends offered by both countries,” the team at UBS said.
Strategists at the Swiss bank noted speculation around possible topics for discussion included trade, Taiwan, and climate issues.
Write to Jack Denton at [email protected]
