Thursday, September 23, 2021
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China Tech Stocks Rebound, but Investors Remain Cautious

Chinese technology shares recouped some of their recent steep losses Thursday, after the country’s authorities swung into damage-control mode, but investors remain wary about how heightened regulatory pressure might crimp future corporate profits.

On Wednesday, Chinese state media talked up local stocks, while a top regulator privately told global financial firms that Beijing will consider the market impact before introducing future policies, according to people familiar with the matter.

“Sentiment remains cautious,” said Manishi Raychaudhuri, the head of Asia-Pacific equity research at BNP Paribas . “Investors believe that these regulatory changes might continue, because the objectives of the Chinese authorities are really long-term in nature.”

It could take one or two quarters to assess the financial impact of recent initiatives, said Adrian Zuercher, the head of global asset allocation at the chief investment office of UBS Group AG’s wealth-management arm. More broadly, he said: “It will take time to re-establish trust with the government.”

In Hong Kong on Thursday, the Hang Seng Tech Index jumped 8%, building on a smaller rise in the previous session. Still, it remains 7% below where it was a week ago, and 36% under its mid-February peak, before an earlier phase of the tech crackdown started to rattle investors. The broader Hang Seng Index rose more than 3%.



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