China Stocks Extend Stunning Surge as Traders Cheer Support Vows

The Hang Seng China Enterprises Index, a gauge of Chinese firms listed in Hong Kong, jumped as much as 8.2% early on Thursday before paring half of its advance. Its jump in the previous session was the biggest since 2008. An index of Chinese tech names surged as much as 12% before trading up 4.1% as of 10:08 a.m. in Hong Kong.

Chinese equities are witnessing a turnaround after what seemed like a bottomless rout, as Beijing on Wednesday vowed to keep its stock market stable, ease a regulatory crackdown and support property and technology companies. Market watchers are now debating how sustainable this rebound can be, and whether equities have indeed reached a bottom.

“The market was indeed very oversold and it has bottomed,” said Kenny Wen, a strategist at Everbright Sun Hung Kai Co. “Tech will keep recovering but it remains challenging for them to recover to the previous levels, given the shifted regulatory regime in general.”

An yearlong crackdown on Chinese tech has seen the Hang Seng Tech Index fall by more than 50% from its February 2021 peak, even with the latest gains. A measure of U.S.-listed Chinese shares soared the most since at least 2001 overnight.

Thursday’s gains in China and Hong Kong also come amid a broad rally in global stocks after the Federal Reserve hiked rates as expected and Chair Jerome Powell assured that the U.S. economy won’t tip into recession.