Shares in China companies traded on the Nasdaq and New York Stock Exchange notched up big gains today as Shanghai partly eased lockdowns tied to stringent “zero-Covid” policies that left millions of dwellers in one of the world’s richest cities stuck in apartments and building communities for up to two months.
Twitter and China social platform WeChat after midnight local time today showed images of relieved Shanghai residents posting selfies from iconic spots in the Chinese business hub, along with images of main roadways dotted with vehicles for the first time in weeks.
“Out here in the sticks of Pudong (eastern Shanghai) I swear I can hear fireworks going off as people celebrate the end of the lockdown,” Jeffrey Wilson, a lawyer and long-time American resident, wrote on Twitter.
Beyond expected pent-up consumer spending, investors buying shares today are also hoping government stimulus will help spur a rebound in the world’s second-largest largest economy in the second half of the year.
On a day in which U.S. main stock indexes fell on interest rate and inflation concerns, China’s e-commerce bellwethers chalked up gains. Alibaba gained 2.8%, Pinduoduo rose by 4.2% and JD.com climbed. 4.6%. Online travel leader Trip.com climbed 3.6%, while express delivery firm ZTO rose by 8.8% (see related post here).
Shares in KE Holdings, one of the world’s largest real estate brokerages, shot up by 16%, while Yum China, whose Pizza Hut and KFC stores make up part of China’s largest restaurant chain operator, rose by 5.2%.
Electric vehicle makers that may benefit from eased supply chain bottlenecks and government stimulus plans also gained. Among them, NIO rose by 4.9%.
Large long- and medium-term questions remain about the sustainability of the country’s zero-Covid policies, China’s strained relations with Western countries, and political uncertainty in the run-up to a Communist Party gathering later this year in which President Xi Jinping is expected to seek a third term in office.
Today, however, was mostly a day for relief for those able to take advantage of Shanghai’s eased rules.
See related posts: