Wrapup: China stocks eye best week in years on audit, reopening hopes

Country Garden Services Holdings

04/11/2022 06:23

(Adds quote and background, updates prices)
    By Rae Wee and Summer Zhen
       SINGAPORE/HONG KONG, Nov 4 (Reuters) - Chinese stocks
soared and the yuan jumped on Friday, setting Hong Kong's Hang
Seng on course for its best week in a decade, on hopes for twin
relief in U.S.-China tension and COVID rules.
        The Hang Seng  .HSI  surged either side of the midday
break and was last up 7%, and heading for a weekly gain of more
than 10% for the first time since November 2011. The Shanghai
Composite  .SSEC  rose 2.7% and was headed for a 5.6% weekly
gain, the largest in more than two years.
    Bloomberg News reported initial U.S. inspections of audit
papers at U.S.-listed Chinese companies - a long-running point
of regulatory tension and risk - finished ahead of time, raising
hopes that the U.S. officials were satisfied.
        Unsubstantiated social media posts flagging an aim to
relax COVID rules in March have also driven optimism all week
and seemed to get new momentum on Friday from the appearance of
Guang Zeng, former chief expert of epidemiology, at a Citi
investor conference on the topic of China's exit from
zero-COVID.
    "The optimism right now is basically a removal of certain
types of uncertainties that have been lingering ... but the
outlook is really mixed," said Peiqian Liu, China economist at
NatWest Markets in Singapore.
    Changes to COVID policies have not been officially flagged
and were forcefully dismissed by a foreign ministry spokesman
earlier in the week. An early conclusion to audit checks has not
been confirmed by either Chinese or U.S. officials and the
Bloomberg report carried no comment from either side.
    "I think that probably explains why Alibaba is up 20%, not
80%... but that can't discount the optimism we see right now,"
said Liu.
    Alibaba shares  9988.HK  were last up 13%. JD.com shares
 9618.HK  also rose 13%. The Hang Seng Tech index  .HSTECH  rose
8%. Onshore the blue-chip index  .CSI300  rose 3.3%.
    The yuan  CNY=CFXS  rose about 0.9% to 7.2410 per dollar,
despite broad dollar gains elsewhere.  CNY/ 
 (Reporting by Tom Westbrook. Editing by Sam Holmes)
 ((tom.westbrook@tr.com; +65 6973 8284;))