Chinese tech stocks rally as Tencent jumps 8.8%, JD.com surges 15% higher. On Tuesday, Hong Kong-listed Chinese tech stocks staged a huge rally as investors have set clear expectations on the regulatory outlook.
The Hang Seng Tech Index traded 7% higher, outperforming the broader index which rose 2.5%.
Tencent rose 8.8%, food delivery giant Meituan jumped 13.5%, while Alibaba’s Hong Kong-listed was up 9.5%. Wood’s Ark Investment Management bought 164,889 American depository receipts of JD.com on Monday.
The tech-heavy Hang Seng index dropped more than 20% from its mid-February peak. The benchmark is still 18% down in its February level. Chinese tech companies have shed billions of dollars of value.
At the beginning of this year, regulators released anti-monopoly rules targeting the country’s so-called platform companies. This month, regulators introduced guidelines to prevent unfair competition in the internet sector. China issued a major data privacy law on Friday. The law named the Personal Information Protection Law (PIPL) will take effect in November, following two other key data policies.
“The capital market probably feels that the release of the PIPL ... completes the trifecta of China’s data governance regime, such that Chinese regulators may finally take a pause in 2021 from unabating lawmaking for the tech industry that was little regulated last decade,” said Winston Ma, adjunct professor of law at the New York University School of Law.
Tencent’s second-quarter net profit surpassed expectations while Baidu’s revenue beat analyst expectations.