Expectations for Eased COVID-19 Measures... Pan-China Stock Markets Surge 'Hong Kong Up 5.36%'

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] As voices of self-reflection on the side effects of China's 'Zero COVID' policy emerge, the pan-China stock market surged sharply on the 4th amid expectations of easing quarantine measures.

According to Bloomberg, the Hong Kong Hang Seng Index closed at 16,161.14, soaring 5.36% that day. In particular, the Hong Kong H-Share Index (HSCEI), composed of mainland Chinese companies listed in Hong Kong, jumped 6.03%, pushing its weekly gain to over 9%. The Shanghai Composite Index rose 2.43%, and the Shenzhen Component Index increased 2.68% at the close.

Earlier, on the 1st and 2nd, the Chinese stock market showed strength as unconfirmed posts about the authorities possibly relaxing the strict Zero COVID policy spread on social media. However, when the National Health Commission of China (NHC) stated that it would maintain the Zero COVID policy, the market fell sharply on the 3rd.

According to the state-run Global Times on the 4th, the NHC emphasized at a meeting on the 2nd that efforts should be made to minimize the scope of quarantine controls and to implement 'precision quarantine' that involves the smallest sacrifice in the shortest time.

This reflects a move to correct mistakes where excessively strict quarantine measures led to property damage and loss of life. The Global Times also reported that voices pledging precision quarantine have emerged regionally in Henan Province, Inner Mongolia Autonomous Region, Gansu Province, and others.

Despite the Chinese authorities not officially confirming any easing of Zero COVID, the pan-China stock market surged. However, uncertainty is expected to persist in the Chinese stock market until a definitive announcement on easing the Zero COVID policy is made.

Justin Tang, Head of Asia Research at United First Partners, analyzed, "There is still a tug-of-war between bulls and bears, between investors buying at the bottom and weary investors. This tug-of-war will continue in the short term until it becomes clear whether the new Chinese leadership will introduce pro-market policies."

This content was produced with the assistance of AI translation services.