© Reuters.
Investing.com — Heavyweight Chinese technology stocks rose on Tuesday, extending a recent run of strong gains as traders bet on a clearer regulatory outlook for the sector, while expectations of more stimulus measures also aided sentiment.
The country’s biggest technology stocks saw a three-day rally as recent government fines on Alibaba’s Ant Group and Tencent (HK:) spurred bets that the government had now ended its regulatory crusade against the sector.
The People’s Bank of China (PBOC) had on Friday imposed a nearly $1 billion fine on Ant and a $415 million fine on Tencent for allegedly mishandling customer data. But Ant had then announced a $6 billion share buyback, which Alibaba said it was considering participating in.
Hong Kong shares of Baidu Inc (HK:) (NASDAQ:), Alibaba Group (HK:) (NYSE:) and Tencent – which make up the BATs trio – rose between 1.6% and 2.2%, helping spur a 1.5% jump in the index. Other stocks including JD.com (HK:) (NASDAQ:) and Meituan (HK:) also rose in a similar range.
China’s improving rhetoric towards its tech giants concludes a nearly three-year-long regulatory clampdown, which had started with the abrupt cancellation of Ant’s late-2020 initial public offering. Beijing had then leveled a series of antitrust investigations against its biggest tech firms, which had severely dented their stock valuations.
But bets on an easier rhetoric from China also come as the government struggles to shore up a slowing post-COVID economic recovery. Chinese economic growth is expected to have slowed in the second quarter amid weak manufacturing activity, soft export demand, and subdued private spending and investment.
Slowing growth also spurred bets that Beijing will roll out more stimulus measures to support the economy, which in turn triggered buying into local stocks.
Chinese property stocks rose on Tuesday after the PBOC extended recent emergency spending measures for the sector.
