Hong Kong stocks rocket 7.4% amid reports China is dialling down strict Covid measures

Shares rise by over 7 per cent on Friday, including the Shanghai Composite index which jumped by 2.6 per cent

Hong Kong shares have soared after reports in local Communist Party newspapers said China’s officials were being urged to move away from the zero-Covid policy and not impose stringent curbs to arrest the spread of the disease.

Shares rose by over 7 per cent on Friday, including the Shanghai Composite index, which jumped by 2.6 per cent.

There has, however, been no official confirmation on China changing its strict Covid pandemic measures that include mass testing, snap lockdowns and long quarantine for travelers.

China has continued with its zero-Covid policy for three years even as other countries have sought to ease stringent lockdowns to ease the burden on people and businesses.

Shares in the country rose rapidly after an article by former top trade envoy Liu He in Communist Party newspaper People’s Daily said Beijing would continue to pursue market reforms.

Mr Liu, along with a few others, was dropped from the top leadership ranks at a party congress last month.

Another state-run newspaper, Global Times, reported on Wednesday that the Chinese National Health Commission advised urging officials to try to curb outbreaks using the “minimum scale affected, and the shortest time and lowest cost possible”.

The report said the break in policy was “in a bid to correct mistakes from overly strict measures that have caused damage to people’s properties and lives”.

Amid speculation that there might be a change in policy, Hong Kong’s Hang Seng Index jumped 16,221.86 while the Shanghai Composite added 2.1 per cent to 3,060.39.

However, Japan’s benchmark Nikkei 225 dropped nearly two per cent to 27,120.61.

In Australia, the S&P/ASX 200 added 0.3 per cent to 6,878.20, while South Korea’s Kospi gained 0.3 per cent to 2,335.72.

The easing of strict Covid norms may alleviate supply chain disruptions that have slowed economic activity in China in the three years of the pandemic.

Additional reporting by agencies