Shares in Hong Kong jumped on news that the Chinese government may further ease Covid-zero restrictions, while stocks linked to the reopening of the economy rose.
The Hang Seng index climbed 3.8%, offsetting Wednesday’s sell-off, while an index of Chinese tech stocks traded in the city rose 7%. Macau casino shares rose 13%. The city’s flag carrier, Cathay Pacific Airways Ltd., increased profits.
The rise in the market followed local media reports that Hong Kong is considering lifting its outdoor mask mandate and easing testing requirements for incoming travelers. Hong Kong aims to maintain its status as a financial center in the region by gradually opening up its borders in an attempt to revitalize its economy and markets.
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Along with moves by the Chinese authorities to ease their stance on zero Covid, traders and investors are becoming more optimistic about the outlook for equities in the region.
As China loosens its austerity, it gives Hong Kong a chance to relax as one of the first major border openings will be between the mainland and Hong Kong, which will boost Hong Kong’s local economy, which is struggling due to a lack of arrivals from the mainland.
On Wednesday, China further abandoned the harsh principles of its virus eradication strategy, including forcibly placing infected people in quarantine camps.
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