Overseas-listed Chinese stocks jump as Beijing soothes nerves

March 16 (Reuters) – Overseas-listed Chinese stocks rallied on Wednesday after Beijing pledged to maintain market stability, calming the nerves of overseas investors after a sell-off amid concerns over differences between China and the West in the Russian-Ukrainian War.

Remarks by Chinese Vice Premier Liu He, who said Beijing would put in place support for the economy and keep markets stable, sparked a rebound from 21-month lows for local stocks, also fueling a rally for Chinese stocks listed in the United States and Europe.

JD.com rose 23%, Alibaba rose 16% and Pinduoduo (PDD.O) jumped 35% in early US trading, after all falling to multi-year lows in Tuesday’s selloff . read more The iShares MSCI China (MCHI.O) exchange-traded fund posted a latest rise of around 14%.

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Gaming company NetEase, online video platform IQIYI (IQ.O), music streaming company Tencent Music (TME.N) and mobile game publisher Bilibili saw similar outsized moves, while Prosus, Amsterdam-listed (PRX.AS), which owns a 29% stake in Chinese tech giant Tencent (0700.HK), also rose sharply.

Citibank’s Asia-Pacific trade strategist in Hong Kong, Mohammed Apabhai, compared the moment to the Federal Reserve’s market support in 2020 or the then-ECB chief’s “whatever it takes” speech, Mario Draghi, who stemmed the eurozone crisis in 2012.

“It’s not quite that order of magnitude, but it’s not that far off either,” he said.

“The easing that the market expected didn’t materialize. But now it seems China has realized that something needed to be done to support the economy, something appropriate.”

The gains also reflect investors looking for a bargain after Chinese stocks came under heavy selling pressure in recent days. Hong Kong stocks (.HSI) fell to their lowest level in six years on Tuesday.

“Although it is still a volatile and somewhat opaque market, I think it is a good time to look at Chinese equities as valuations are good and macro data is picking up,” said Giuseppe Sersale. , fund manager at Anthilia in Milan.

Frankfurt-listed certificates of deposit for Alibaba were among the most traded stocks on the Tradegate and Lang & Schwarz platforms, suggesting interest from German retail investors.

According to Vanda Research, which tracks retail flows, appetite for Chinese ADRs has increased the most since September 2021, with net purchases over the past 10 trading sessions exceeding $500 billion, the highest level. over six months.

Separately, China’s securities regulator said it will continue to communicate with U.S. regulators and strive to reach an agreement on China-U.S. cooperation in audit supervision as soon as possible. Read more

The speed with which Beijing reacted to this week’s selloff suggests it doesn’t want to let things get out of hand, AJ Bell chief investment officer Russ Mold said in London.

“Its main goal is common prosperity and stock markets are important because many Chinese retail investors have money in stocks, so their wealth is at stake if stock values ​​fall,” he said.

Some analysts see Chinese stocks as a possible good long-term investment, after a torrid 2021 amid a slump in the housing sector and a severe regulatory crackdown on tech giants. Read more

The MSCI China Index (.dMICN00000PUS) is currently trading at around a 36% discount to global equities, twice the 20-year average discount, according to Refinitiv data.

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Reporting by Danilo Masoni in Milan and Tiyashi Datta in Bangalore; additional reporting by Caroline Valetkevitch in New York; Editing by Louise Heavens and Lisa Shumaker

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