China tech stocks surge as Xi's meeting fuels hopes of policy shift

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Chinese tech stocks continued to rally on Tuesday on optimism that President Xi Jinping's rare meeting with the country's tech entrepreneurs foreshadowed a regulatory U-turn after years of a sector-wide crackdown. 

The Hang Seng Tech Index climbed 2.5 per cent to close at a fresh three-year high and bring the gains for the past month to over 30 per cent. The overall Hang Seng Index jumped 1.6 per cent to its highest since early October. 

Index heavyweight Alibaba surged 3.3 per cent to a near three-year high after state media CCTV showed Xi and Alibaba founder Jack Ma shaking hands at the meeting on Monday. 

Tencent jumped 2 per cent to its highest since 2021 and Xiaomi rallied over 7 per cent to a record high. 

Their executives were among the high-profile Chinese tech leaders at the symposium which was considered a signal that private enterprise could be treated kindly and that a crackdown on tech giants is over.   

"We think the symposium marks an end to the crackdown, potentially removing one of the longest-lasting overhangs on the sector's performance," analysts at UBS Global Wealth Management said in a note. 

Xi's support for innovation industries, ongoing macro policy support and other fundamental improvements will be crucial drivers of the Chinese tech sector's outperformance against the broader market from here, they said. 

Wall Street banks such as Goldman Sachs, Citi and Bank of America have changed their stance on China since the DeepSeek-triggered tech rally, saying the bull case is getting stronger for Chinese stocks due to the AI breakthrough and Beijing's pro-business shift. 

On the day, however, the onshore markets closed lower as investors booked profit after early-session gains. The blue-chip CSI300 and the Shanghai Composite indexes fell 0.9 per cent each after hitting their 2025 highs earlier in the session. 

The CSI AI index slipped 2.5 per cent to lead the losses onshore, with top chip designer Cambricon Technologies tumbling 5 per cent. The gauge is still up nearly 12 per cent so far this year. 

US-listed shares of Chinese firms mirrored gains in their domestic peers. 

Shares of Alibaba, online brokerage firm UP Fintech Holding and online education firm Gaotu Techedu jumped between 3.2 per cent and 5.5 per cent in premarket trading. 

The iShares MSCI China ETF and iShares China Large-Cap ETF were up 1.5 per cent each in premarket, while the tech-focused KraneShares CSI China Internet ETF gained 1.6 per cent.  (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)