(Bloomberg) — Shares in Hong Kong and China extended gains on expectations a meeting between President Xi Jinping and business leaders will give a boost to private companies.
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A regional benchmark of shares rose while Australian stocks increased losses after the central bank cut rates. The dollar strengthened against most of its Group-of-10 peers while US Treasury 10-year yields were up 3 basis points to 4.5% as the bond market reopened Tuesday after the Presidents’ Day holiday. Earlier, Federal Reserve Governor Christopher Waller said recent economic data supported keeping interest rates on hold until more progress was seen in inflation.
The optimism around China got a further lift Monday after a meeting between Xi and corporate leaders, including Alibaba Group Holding Ltd. co-founder Jack Ma. Several analysts saw the conclave as a possible end to the years-long crackdown on the private sector. Separately, DeepSeek’s breakthrough in artificial intelligence has driven a rally of more than $1 trillion in Chinese shares.
“It’s a good rebound, but before it really evolves into a multi-year rising trend, a lot needs to be done,” Hao Hong, a partner and economist at Grow Investment Group, said in a Bloomberg TV interview. “If you really want a sustainable bull market, you really want a sustainable growth model going forward.”
Xi’s meeting drew many of the biggest names in Chinese business over the past decade, representing industries from chipmaking and electric vehicles to AI. The summit demonstrated Beijing’s softer stance toward the companies that fuel most of economy, just as Washington ramps up a potentially debilitating campaign of global tariffs.
A gauge of major Hong Kong-listed technology stocks is trading near a three-year high after its DeepSeek-driven rally. Technology stocks including Alibaba and Xiaomi Corp. contributed the most to the gains to the Hang Seng China Enterprises Index.
Meanwhile, Fed Governor Waller said if US inflation behaves as it did in 2024, policymakers can get back to cutting “at some point this year.”
“If this wintertime lull in progress is temporary, as it was last year, then further policy easing will be appropriate,” Waller said in remarks he’s scheduled to deliver on Tuesday in Sydney. “But until that is clear, I favor holding the policy rate steady.”
