Type to search

Hong Kong Tech Recovers As Biden And Xi Talks Lift Asia Markets

Tech giants Tencent, NetEase, Alibaba and JD.com regained some of their losses following China’s latest crackdown while analysts hailed the feel-good factor after the world’s economic super powers started talking again

Asian stock markets
Tokyo, Sydney, Manila, Mumbai and Jakarta all dropped but Singapore and Seoul advanced. Photo: Reuters.


Asia’s major markets bounced back on Friday as investors made the most of the positive mood on trading floors off the back of long-awaited talks between Joe Biden and Xi Jinping.

Hong Kong led the way thanks to healthy tech firm buying just a day after the sector was battered by China’s latest clampdown on the gaming industry.

And while Wall Street ended in the red again, there was some cheer from the European Central Bank as it tweaked its monetary stimulus programme, with boss Christine Lagarde saying the move was not a “tapering” but a “recalibration.”


Also on AF: Sea Set To Claim $6.3 Billion in Southeast Asia’s Biggest Fundraiser


But she did warn that “the speed of the recovery continues to depend on the course of the pandemic and progress with vaccinations.”

The move eased concerns about the end of the ultra-loose monetary policy that has been crucial to a recovery in economies and equities.

It also came as the Federal Reserve considers when it will start winding in its own scheme, with observers expecting it before the end of the year.

The day had already started on a positive note before news trickled in that Biden and Xi had held their first talks by phone since February, soon after the US president was inaugurated.

In the 90-minute call, Biden urged that “competition” between the world’s top two economies did not become “conflict”, according to the White House, while Xi called for a new direction in a relationship beset by “serious difficulties.”



The call was “candid, in-depth”, according to Chinese state broadcaster CCTV.

The talks come as relations between the two are at a low ebb with the nations butting heads on a range of issues including trade, national security, human rights and technology.

OANDA analyst Jeffrey Halley said reports that Xi had been making soothing comments towards ASEAN and Australia had also provided traders with some optimism.

“All of that is music to the ears of the Asia-Pacific,” he said in a commentary.

“Improved trade with the region; tick. Potentially thawing relations with Australia; tick. President Biden and President Xi talking in person as the first step to warming relations between the two superpowers; tick, tick, tick, tick.

“Unsurprisingly, Asian equities are following the China charm offensive and heading North.”



Hong Kong was the standout market, surging 1.9%, boosted by tech giants Tencent, NetEase, Alibaba and JD.com after they suffered extensive losses on Thursday after Chinese officials ordered gaming firms to stop focusing on profits.

The Hang Seng Index climbed 1.91%, or 489.91 points, to 26,205.91. The Shanghai Composite Index added 0.27%, or 9.98 points, to 3,703.11, while the Shenzhen Composite Index on China’s second exchange added 0.31%, or 7.74 points, to 2,502.02.

Tokyo resumed its own rally on stimulus hopes, while there were also healthy gains in Shanghai, Sydney, Seoul, Singapore, Taipei, Jakarta and Manila.

The benchmark Nikkei 225 index gained 1.25%, or 373.65 points, to end at 30,381.84, while the broader Topix index rose 1.29%, or 26.72 points, to 2,091.65.



However, while Asia was on course to end the week with a flourish, economies and stock markets remain hostage to the ravages of the Delta Covid variant, which continues to send infection rates spiking and has forced some governments to impose strict containment measures.

Analysts warned that the recovery would take time. “Ultimately, the path back to a more normal economic environment is likely going to be long, and we can expect setbacks along the way,” Brad McMillan, of Commonwealth Financial Network, wrote in a note.

Oil prices rose after suffering steep losses on Thursday in reaction to news that China had released some of its own strategic reserves in order to lower prices.

The move came after data showed factory-gate inflation in the country had hit a 13-year high last month owing to the soaring cost of commodities.



Tokyo – Nikkei 225: UP 1.3% at 30,381.84 (close)

Hong Kong – Hang Seng Index: UP 1.9% at 26,205.91 (close)

Shanghai – Composite: UP 0.3% at 3,703.11 (close)

New York – Dow: DOWN 0.4% to 34,879.38 (close)


  • AFP and Sean O’Meara


Read more:

Facing Stalemate In Ties, Biden And China’s Xi Discuss Avoiding Conflict

China Gaming Shares Plunge as Beijing Tightens Regulatory Crackdown

Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


AF China Bond