Chinese tech stocks jumped to their highest level in a month after a round of share buybacks by Tencent boosted market sentiment, according to a report by Bloomberg on Tuesday.
The Hang Seng Tech Index increased by 1.6% on Tuesday to the highest position since late July, expanding gains from last month’s low to nearly 17%.
Tencent entered into the market to buy back shares valued at $12.9 million, pushed traders to pile into the market this week. Fewer warnings and more targeted regulations by Beijing also offered relief.
Matthew Kanterman, Bloomberg Intelligence analyst, stated that the lack of more bad regulatory news plus company share repurchases might be responsible for a continued shift in investor sentiment to being more constructive on China’s tech stocks.
Tencent has been repurchasing its shares in the public market almost every day since announcing its second-quarter results on August 18.
The Chinese technology bellwether has purchased back a combined 2.2 million shares since at an average price of HK $464 per share.