Consumer and retail shares of China rallied on Thursday after reports that Beijing is looking towards calling an end to its strict COVID-Zero policy.
According to Bloomberg, a gauge of Macau gaming stocks jumped as much as 5.5% marking the biggest gain in two weeks.
If rules of relaxed it would be a catalyst to spur rebound in Chinese shares, which have remained lackluster this year despite bullish calls from money managers. The Wall Street Journal earlier reported, while Beijing is unlikely to ease control before next spring, experimental opening measures could arrive in select cities as early as this summer.
“A fundamental shift in the Covid strategy is definitely a positive for consumer and services-related sectors, but the reopening will likely be done in phases and over several quarters,” said Marvin Chen, a Bloomberg Intelligence strategist, as reported by Bloomberg.
“The impact on earnings may not be obvious until closer to year-end, but valuation and sentiment may recover in the meantime.”
Relaxation of COVID policies could potentially shore up Chinese economy which showed signs of moderate expansion.
