(Bloomberg) -- Chinese tech stocks led a broad rally late Thursday as Beijing’s fresh stimulus vows coupled with bets placed ahead of a key Federal Reserve event lifted sentiment.
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Hong Kong’s Hang Seng Tech Index rose 6%, the most in nearly four months, with JD.com Inc. and Bilibili Inc. leading gains. The benchmark Hang Seng Index advanced 3.6%, the best performance among Asia’s equity benchmarks.
Shares in the city opened higher on the day after the morning session was suspended due to a storm. In addition to the Chinese government’s 1 trillion yuan ($146 billion) of support for the economy, traders cited short covering, an adjustment of positions ahead of Jackson Hole, and speculation that the US and China are nearing a deal on their auditing spat as reasons behind the rebound.
“Growth, tech and offshore listed China stocks are leading gains suggesting that Fed meeting may be playing a bigger role in the late day move,” said Marvin Chen, a strategist with Bloomberg Intelligence.
Stocks in Hong Kong had slumped to the lowest in months this week, as global risk-off sentiment spread ahead of the Federal Reserve’s Jackson Hole symposium on Friday. Concerns over China’s economic growth, with a deepening property crisis and now power shortages spurred by a severe drought, had added to the gloom.
Following days of losses, the Hang Seng Index was also looking ripe for a rebound to some market watchers based on various technical indicators.
The gauge was near “oversold” levels on monthly measures of the relative strength index, approaching the 30-threshold that’s never been reached in data going back to 1972. Morgan Stanley strategist Gilbert Wong said “the risk of short squeeze in China and Hong Kong equities is rising.”
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