Hong Kong stocks leap as Alibaba, Tencent, and Meituan rocket over 20% after China pledges to keep markets stable

• Stocks listed in Hong Kong and Mainland China surged Wednesday after Beijing pledged support for financial markets.
• China's Vice Premier Liu He eased investor fears by promising policies that benefit markets.

Stocks in Hong Kong and China leaped on Wednesday after Beijing vowed to keep capital markets stable and said it supported foreign listings.

Chinese Vice Premier Liu He promised policies that would boost financial markets and spur economic growth, responding to a slump in stocks in recent days.

Liu said Wednesday that government departments should "actively introduce policies that benefit markets," Chinese media agency Xinhua reported.

China's state council promised investors relief on a number of concerns that drove a sell-off in markets this week.

"All policies that have a significant impact on capital markets should be coordinated with financial management departments in advance to maintain the stability and consistency of policy expectations," Liu said.

He added that China encourages long-term institutional investors to boost their stock holdings.

Beijing is also supporting stock market listings overseas and will work towards stabilizing the struggling real estate sector, the report said. All these concerns had soured the outlook for Chinese stocks since last year.

Saxo Bank's head of equity strategy, Peter Garny, attributed the rise in indices to comments by the Vice Premier, who reiterated China's support to local corporates to list on overseas exchanges.

Hong Kong's Hang Seng closed 9% higher after falling nearly 6% on Tuesday to close at its lowest since early 2016.

Meanwhile, the Hang Seng China Enterprises Index rose as much as 13%, the most since 2008.

Chinese tech stocks in Hong Kong soared, with Tencent rising 23%. Alibaba rose 27.3%, NetEase rose 23.4%, and Meituan rose 32%. The Hang Seng Tech index rose 22.2%.

Equities in these benchmark indices had shed about a combined $1.5 trillion in the first two days this week, partly driven by speculation that China's relationship with Russia risks retaliation from the US.

Alibaba had plunged 10% last week after the US Securities and Exchange Commission identified five Chinese companies for potential delisting from exchanges due to inadequate disclosures.

But Liu said talks between China and the US on foreign listings have made progress and regulators are discussing cooperation plans, and the government will support local firms wanting to list abroad.

Wednesday's reversal in stocks came as China grapples with its worst COVID-19 outbreak in two years, reporting 5,000 new cases as of Tuesday.

Mainland Chinese tech stocks saw robust gains, with the Shanghai Composite closing up 3.4%.

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