Hong Kong (AFP) – Hong Kong resumed its tech-led rally on a healthy day for Asian markets Tuesday as a meeting between President Xi Jinping and China’s top business leaders fanned hopes that a years-long crackdown on the private sector is coming to an end. The Hang Seng Index’s gains extended an impressive start to the year, with the emergence of a new chatbot from Chinese startup DeepSeek stoking optimism in the country’s AI drive. The tech revival has also helped offset worries about the impact of US President Donald Trump’s hardball foreign policies and decision to impose sweeping tariffs on trade partners.
Among the luminaries meeting Xi in Beijing were Alibaba co-founder Jack Ma, Huawei founder Ren Zhengfei, and Wang Chuanfu, CEO of electric-vehicle giant BYD. Since taking the helm, Xi has strengthened the role of state enterprises in the world’s second-largest economy and waged crackdowns on areas of the private sector undergoing “disorderly” expansion. The drive has hammered some of the country’s biggest names in recent years, sending their share prices plummeting.
State news agency Xinhua reported that Xi had “stressed that the difficulties and challenges currently faced by the development of the private economy have generally appeared during the process of reform and development, and industrial transformation.” “They are partial rather than general, temporary rather than long-term, and surmountable rather than unsolvable,” Xi said, according to Xinhua. He added that Beijing was focused on removing obstacles to commerce, promoting fair competition, cracking down on arbitrary fines, and protecting business interests.
Monday’s gathering provided some much-needed relief to investors and fanned hopes for a sector revival. “This was seen as a strong signal that his crackdown on the tech sector is over and with forthcoming pro-business policies to help revive the economy,” said National Australia Bank head of market economics Tapas Strickland. Ma’s inclusion hinted at the billionaire magnate’s potential public rehabilitation after years out of the spotlight following a tangle with regulators. Shares in Alibaba rose more than four percent Tuesday, and have now piled on more than 50 percent since the turn of the year. There were also healthy gains in other tech firms including Tencent, XD Inc, and Netease.
Shanghai, Tokyo, Singapore, Seoul, Taipei, Manila, and Jakarta also rose. The advances came after a strong day in Europe, where Frankfurt hit a new record. Wall Street was closed for a public holiday. Meanwhile, Federal Reserve governor Christopher Waller suggested the bank could cut interest rates this year if inflation performs as it has in the past, pointing to last year’s spike in the winter followed by a quick easing. “If this wintertime lull in progress is temporary, as it was last year, then further policy easing will be appropriate,” he said in prepared remarks due to be delivered on Tuesday in Sydney. “But until that is clear, I favour holding the policy rate steady.”
With prices showing signs of ticking back up in recent months, traders have scaled back their bets on how many reductions officials would make this year. “The data are not supporting a reduction in the policy rate at this time,” Waller said. “But if 2025 plays out like 2024, rate cuts would be appropriate at some point this year.” His remarks come amid fears that Trump’s plans to impose tariffs and slash taxes, regulations, and immigration will reignite inflation.
– Key figures around 0240 GMT –
Tokyo – Nikkei 225: UP 0.3 percent at 39,296.11
Hong Kong – Hang Seng Index: UP 1.7 percent at 23,001.87
Shanghai – Composite: UP 0.2 percent at 3,359.80
Euro/dollar: DOWN at $1.0465 from $1.0483 on Monday
Pound/dollar: DOWN at $1.2601 from $1.2613
Dollar/yen: UP at 151.74 from 151.41 yen
Euro/pound: DOWN at 83.06 pence from 83.11 pence
West Texas Intermediate: UP 0.6 percent at $71.19 per barrel
Brent North Sea Crude: DOWN 0.1 percent at $75.13 per barrel
New York – Dow: Closed for a holiday
London – FTSE 100: UP 0.4 percent at 8,768.01
© 2024 AFP
