Chinese tech stocks rallied after Beijing vowed to step up support for the economy which lured some dip buyers.
The Hang Seng Tech Index jumped as much as 5.8% on Tuesday – rebounding from more than a month low. Policy makers in China proposed support to boost consumption and will end the rectification work at major tech companies as soon as possible.
Earlier Chinese tech stocks saw massive sell off over continued pressure from regulatory crackdown and on risk of getting delisted from American exchanges. The Hang Seng Tech Index lost momentum since a brief rally in March.
“It’s a combination of positive news and technicals,” said Billy Leung, a research analyst at Optiver Australia Pty Ltd.
The measures “show that the government does not like instability. Technical-wise, we were close to very oversold levels last night.”
With Tuesday’s gains, the tech index has recovered all of its plunge in the previous session. The benchmark Hang Seng Index also advanced as much as 1.9%.