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(Bloomberg) – Chinese tech stocks continued their rebound on Monday after Beijing fined food delivery giant Meituan lower than expected.
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Hong Kong’s Hang Seng Technology Index jumped 3% in a third day of gains after closing at a record low on Wednesday. Meituan rose 8.7%, making him the best performer on the gauge. The stock also boosted the larger Hang Seng Index, which gained as much as 2.2%.
READ: China fines Meituan $ 530 million to end antitrust investigation
“Meituan’s better-than-dreaded antitrust sanction could cause investors to rethink the severity of sanctions that could stem from the technological crackdown in China,” said Matthew Kanterman, analyst at Bloomberg Intelligence. “However, uncertainty remains and may continue to keep sector valuations depressed for several more months until the situation becomes clearer.”
The tech sector has been in Beijing’s sights for nearly a year as the government seeks to curb tech billionaires and adapt their business models to fit President Xi’s “common prosperity” campaign Jinping. Rising global bond yields have compounded problems for tech stocks, reigniting concerns about their valuations.
The tech rebound gained some support last week with the announcement that US President Joe Biden was planning to meet with Xi before the end of the year.
Among other tech stocks expected to advance on Monday, JD Health International Inc. jumped 10%, the highest since September 1, while Alibaba Group Holding Ltd. climbed 8.4%, the highest since August 24. Alibaba got a supplement. boosted last week by a report that the Daily Journal Corp. by Charlie Munger had increased its stake by 83% in the last quarter.
“The momentum continues to buy Alibaba after Munger,” said Steven Leung, executive director of UOB Kay Hian in Hong Kong.
While sentiment was positive on Monday, the tech gauge remains more than 40% below its February high and the outlook for the industry is still clouded by government crackdown.
(Updates with investor analyst comments and the latest prices)
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