Shares of Chinese technology companies rose on the last day of trading in the year after big gains on Wall Street for Chinese companies listed on the US stock market, although that growth was not enough to shake off the darkness after miserable 2021 for a sector marked by a regulatory shock.
Hong Kong’s Hang Seng index rose 1.2 percent on Friday, while the technology index of the stock market rose 3.6 percent. China’s CSI 300 shares listed in Shanghai and Shenzhen rose 0.4 percent.
The rise followed an increase in the Nasdaq Golden Dragon index of Chinese large and medium-sized companies, which jumped 9.4 percent on Thursday, its best one-day performance in more than a decade. The rise was driven by double-digit profits from companies including search engine Baidu, video-sharing platform Bilibili and New Oriental Education.
The Golden Dragon Index fell 42 percent in 2021 Xi Jinping’s campaign curb the country’s technology leaders and the threat of forced deletion from the list they took their toll on American capital markets.
Gains in Asia on Friday also boosted some of China’s largest technology companies, with e-commerce group Alibaba adding 8 percent to trading in Hong Kong and rival JD.com about 5 percent. NetEase, a gaming company, grew just under 4 percent, while food delivery group Meituan added 3.2 percent.
Dickie Wong, head of research at Kingston Securities, said testing last year had already been assessed and that market sentiment was returning to China’s technology sector. “Shares related to the Internet and technology are now trading at extremely low values,” he said. “It’s time for the return ball.”
Market enthusiasm came after China reported a slight increase in manufacturing activity in December despite a slowdown in the real estate sector, energy supply problems and coronavirus epidemics.
The official index of procurement managers rose to 50.3, in 50.1 in November, according to the National Bureau of Statistics, defying analysts’ expectations of readings below 50, which would indicate a contraction.
The rebound on Friday was not enough to erase Hang Seng’s 2021 defeats. The broader index fell 14 percent in 2021, and the Hang Seng Tech index lost 48 percent since its February high.
The price of the share of Alibaba, which was penalized a a record $ 2.8 billion for antitrust violations in April, almost halved in Hong Kong in 2021, while Meituan is down by more than a fifth, and JD.com and Tencent have fallen by almost a fifth.
Elsewhere, European stock markets were subject to morning trading as trading for this year fell. The regional Stoxx 600 index fell 0.1 percent, while the British FTSE 100 fell 0.3 percent. Germany’s Xetra Dax is closed.
Yields on reference 10-year U.S. Treasury bonds were stable at around 1.51 percent, and trading is expected to be easy throughout the day after the Securities and Financial Markets Association recommended early market closure for the holiday.
Brent oil, the international oil benchmark, fell 0.9 percent to $ 78.81 a barrel.
Additional reporting by Naomi Rovnik from London
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