Last Updated on December 5, 2022 by Bitfinsider
Monday saw a 3% increase in the Invesco Golden Dragon China ETF, which tracks the Nasdaq Golden Dragon China Index. Alibaba and Pinduoduo rose almost 2% apiece, but Tencent Music Entertainment rose 1%. The Chinese electric car brands Nio and XPeng rose by 4 percent and 8 percent, respectively. Bilibili rallied 10%.
The index consists of 65 firms whose stocks are publicly traded in the United States. They perform the majority of their business within the People’s Republic of China.
Amidst Chinese economic recession and popular turmoil, certain major cities, including Beijing and Shenzhen, have taken moves to relax Covid testing standards and quarantine regulations. The action represented a departure from China’s zero-tolerance policy of mandatory lockdowns and frequent testing during the previous two years.
According to Reuters, citing people with knowledge of the situation, China is on the verge of announcing a countrywide relaxation in testing criteria and allowing positive cases and close contacts to isolate at home under specific situations.
Due to the policy shift, Morgan Stanley raised Chinese equities to an overweight rating. Nearly two years ago, Morgan Stanley assigned an equal weight rating to Chinese equities.
The Wall Street company described the new developments as “a definite route towards post-Covid ultimate reopening.”
During Asia trading hours, the Hang Seng Tech Index, which represents the 30 top technology companies listed in Hong Kong, rose 9.3%. For the first time since mid-September, the onshore and offshore yuan surpassed $7 vs the U.S. dollar.
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