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Chinese markets soared and the yuan rose on Friday, with about a trillion dollars added to the value of Chinese stocks in week, as words and news reports fed hopes for twin relief in US-China tension and China’s tough COVID rules.
The Hang Seng surged 5.3% and notched its biggest weekly gain in 11 years. The Shanghai Composite rose 2.4% for a 5.3% weekly gain, the largest in more than two years and China-sensitive assets around the world rose sharply.
Bloomberg News reported initial US inspections of audit papers at US-listed Chinese companies – a long-running point of regulatory tension and risk – finished ahead of time, raising hopes that the US 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.
A former Chinese senior disease control official told a closed-door conference that substantial changes to the country’s zero-COVID policy were set to take place in the next five to six months, according to a recording of the session heard by Reuters.
Gains were broad, overshadowing a downbeat mood in global markets on the prospect of US interest rates rising further than previously expected. Property and tech shares led the way.
Shares in online giants Alibaba and JD.com each rose more than 10% and the Hang Seng Tech index rose 7.5%. Property manager Country Garden Services rose 15% and an index of mainland developers rose 9%.
Hedge fund manager Lei Ming said the re-opening rumour is just the trigger for a rebound in an oversold market.
Gains in value, across Hong Kong, Shenzhen and Shanghai over the week are approximately $1 trillion. However the Hang Seng remains down 30% this year against a 24% fall in world stocks . The Shanghai Composite is down 15% this year. The rally extended to commodities markets with iron ore futures surging on Friday, and China-sensitive stocks listed in London and Europe.
Miners such as Rio Tinto and Anglo American rose sharply along with luxury retails like LVMH and Swiss jeweller Richemont.
US-listed China stocks surged in early trading, with Nasdaq Golden Dragon China index on track for its best week in eight months following its worst monthly performance on record in October.
US stocks up on jobs data: Stocks are up Friday as Wall Street weighs how to read the latest data on the US jobs market and hopes that the world’s second-largest economy may be set for a boost.
The S&P 500 was 1.3% higher in midday trading after the US government said the unemployment rate ticked higher in October and employers added fewer jobs than they had a month earlier. Perhaps even more key for markets was that average raises for workers also slowed last month.
The data offers some hope that the Federal Reserve’s intentional efforts to weaken the jobs market may be starting to take effect and may help lower the nation’s high inflation. The slowdown, though, was more modest than economists expected. And it changed very few minds, if any, on Wall Street about what’s going to happen next: The Fed will keep hiking interest rates toward levels rarely seen this millennium, moves that will further brake the economy and drag on prices for stocks and other investments.
The Dow Jones Industrial Average was up 425 points, or 1.3%, at 32,427, as of 11:17 a.m. Eastern time, and the Nasdaq composite was 1.1% higher.
Markets around the world wobbled in the minutes immediately following the release of the US jobs data, which is one of the most anticipated reports on Wall Street every month. The yield on the two-year Treasury, which tends to track expectations for action by the Fed, jerked up and down a few times before eventually easing.
Stocks also resumed climbing. Markets had been higher earlier in the day, in part on hopes that China may soon relax anti-COVID policies that have sometimes caused entire cities to be locked down for weeks.
Such a move could give a big boost to the global economy when aggressive interest-rate hikes by central banks from the Americas to New Zealand are raising worries about recessions around the world.
The price of copper also climbed 7%. A stronger Chinese economy would devour more raw materials, and shares of miner Freeport-McMoRan soared 11.2% for the biggest gain in the S&P 500.
Stocks also rallied across Europe. France’s CAC 40 rose 3.3%, and Germany’s DAX returned 3%. The yield on the two-year Treasury fell to 4.69% from 4.72% late Thursday.