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Hong Kong stocks soared on hopes that China’s COVID rules could be eased

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TOKYO (AP) — Hong Kong stocks soared more than 7% on Friday after a Communist Party newspaper reported that …

TOKYO (AP) – Shares rose more than 7% in Hong Kong on Friday after a Communist Party newspaper reported that local officials were being urged not to impose overly heavy controls to contain coronavirus infections.

The Shanghai Composite index jumped 2.6% as sentiment was also boosted by an article in the party’s People’s Daily newspaper by China’s former top trade official Liu He, who said the country would continue its market reforms. He appears to have sought to allay concerns after Liu and some other prominent reformers were ousted from the top leadership at a party congress last month.

Hong Kong’s market has been reeling in the past few days as investors pondered signs that Beijing may relax its strict “zero COVID” policy that has kept entire cities under lockdown for weeks. The policy also calls for frequent mass testing and extended quarantine for travelers.

The Global Times reported that China’s National Health Commission advised on Wednesday that officials should try to contain outbreaks using “minimum casualties, as well as the shortest time and the least cost”.

It said it was “in an attempt to right the wrongs of overly harsh measures that have caused damage to property and lives.”

This week has brought a flurry of speculation about the possibility that Beijing may change course after nearly three years of the pandemic. Investors are watching for signs of a recovery in demand in China and an end to production and transportation disruptions that have affected global supply chains.

There was no official confirmation of such policy changes.

Hong Kong’s Hang Seng index fell slightly in the afternoon, gaining 6.7% to 16,361.32. The Shanghai Composite added 2.5% to 3,074.10.

Elsewhere in Asia, Japan’s benchmark Nikkei 225 index fell 1.8% to 27,175.12. Australia’s S&P/ASX 200 added 0.5% to 6,894.80, while South Korea’s Kospi rose 0.7% to 2,344.40.

Wall Street’s benchmark S&P 500 lost 1.1% on Thursday, while the Nasdaq technology composite index fell 1.7% on the day after the Federal Reserve raised its key rate for the sixth time this year. Traders are looking forward to the US jobs report due out later on Friday.

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