The Hong Kong stock exchange gained double digits during the afternoon trading session today. The gain happened after China’s State Council pledged support for the market. According to Xinhua, the State Council’s Financial Stability and Development Committee has pledged to keep the market stable and to support overseas share listings.
The Chinese government convened a meeting to demand that it vigorously promote economic development and eliminate all policies that are detrimental to economic development. After a long decline, China-related stocks were almost all up today around the world.
The availability of Chinese company audits to US officials is currently being disputed by US financial regulators and their Chinese counterparts. The United States has threatened to delist Chinese ADRs if these audits are not provided. Tencent gained nearly 20% and Alibaba gained 19% as a result of the news. The Hang Seng index as a whole is up 9%, while the China tech index in Hong Kong is up 12%.
According to state media reports, China’s tech sector will soon be regulated. The government also stated that it would take on some of the risks for property developers. The price of Bitcoin has remained relatively unaffected by the news.
At the time of writing, the price of the world’s largest digital asset had briefly reached $41,000 late in the morning Asia time but was trading around $39,450, up 2.82%. Traders report that liquidity in crypto is now extremely thin, stifling dynamic market moves as the market awaits the Fed Minutes.
At the time of writing, Crypto remains stable with limited liquidity as Hong Kong markets recover from the worst slump since the 2008 recession. As there’s a growing interconnectedness between virtual assets and financial markets the crypto market could also rise.
Prior to the pandemic, cryptocurrencies such as Bitcoin and Ether had little correlation with major stock indices. They were thought to help diversify risk and act as a hedge against fluctuations in other asset classes. However, after the extraordinary central bank crisis responses of early 2020, this changed. Cryptocurrency prices and US stock indexes both rose as global financial conditions eased and investor risk appetite increased.
UPDATE: With the overall rebound of Chinese concept stocks, Chinese crypto stocks also ushered. Canaan rose nearly 30%, Huobi rose 17%, Ebang rose 10%, and Ninth City rose 16%. The most astonishing gains in Chinese concept stocks came from BEKE and DIDI, which rose 60% and 40%.