Hong Kong Stocks Rebound on Report City May Relax Covid Rules

(Bloomberg) — Hong Kong stocks jumped following a report that the government may further loosen Covid-related restrictions, with shares related to the economy’s reopening surging.

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The Hang Seng Index rose as much as 2.8%, partly erasing Wednesday’s selloff, while a separate gauge of Chinese stocks trading in the city advanced more than 3%. A Bloomberg gauge of Macau casino shares rallied as much as 9.7%. The city’s flagship carrier, Cathay Pacific Airways Ltd., extended gains.

Read: Hong Kong Stocks Rebound on Report City to Ease Covid Rules

The market upswing followed a local media report that Hong Kong is considering scrapping its outdoor mask mandate and easing test requirements for inbound travelers. Hong Kong has been battling to keep its status as a financial hub in the region, gradually reopening its border in a bid to revive its economy and markets.

Combined with moves by Chinese authorities to soften their Zero Covid stance, investors are becoming more optimistic over the outlook for shares in the region.

“As China relaxes policies, it gives room for Hong Kong to relax as well, as one of the first major border reopenings will be between the mainland and Hong Kong,” said Marvin Chen, an analyst at Bloomberg Intelligence. “This will be a boost for the local Hong Kong economy which has struggled in the absence of mainland arrivals.”

On Wednesday, China further jettisoned key tenets of its virus elimination strategy, including forcing infected people into quarantine camps.

–With assistance from Abhishek Vishnoi.

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