Chinese stocks rose after regulators were said to have signaled additional support for the technology sector and on speculation the authorities may lower stamp duties to bolster trading levels.
(Bloomberg) — Chinese stocks rose after regulators were said to have signaled additional support for the technology sector and on speculation the authorities may lower stamp duties to bolster trading levels.
The Hang Seng China Enterprises Index, which tracks major Chinese companies listed in Hong Kong, reversed earlier losses to gain as much as 1.7%. The onshore CSI 300 Index climbed 1.8%, snapping a two-day decline.
Regulators have asked the nation’s largest technology firms to provide case studies of successful startup investments, according to people familiar with that that matter. That appears to be a sign authorities are ready to grant them greater leeway in backing such deals after a crackdown brought them to a virtual halt two years ago.
“News of regulators looking into tech startups and investments may be another signs of fading regulatory headwinds and could revive deal-making in the tech sector,” said Marvin Chen, an analyst at Bloomberg Intelligence in Hong Kong. That “looks to be boosting sentiment,” he said.
Demand for Chinese equities are also bolstered by a report on the possibility of lowering of stamp duties as part of its efforts to boost capital markets. The CSI 300 financials sub-index rose as much as 3.5%, the best-performing sector on the onshore benchmark index.
“The speculation about cutting stamp duty has helped lift market sentiment today, as the move would be following the vows to boost financial markets mentioned during the politburo” meeting, said Steven Leung, executive director at UOB-Kay Hian Hong Kong.
Volumes for call options on the Hang Seng China Enterprises Index were double those for put contracts on Friday, according to data compiled by Bloomberg. A contract for 12% upside through March 27 was the most actively traded. Call option volumes have been 50% higher than those for puts on average over the past five days.
–With assistance from Charlotte Yang and Ishika Mookerjee.
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