Tech stocks lead Hong Kong market higher on hopes of improved China-US relations


May 27 (Reuters) – Hong Kong shares jumped nearly 3% on Friday, led by technology stocks following better-than-expected results from Alibaba Group and Baidu, while comments from a U.S. official on relations with China have been interpreted by some as positive.

** Expectations that Beijing would implement more measures to revive growth also boosted the market.

** Hong Kong’s Hang Seng Index gained 2.9%, while the Hang Seng Tech Index jumped 3.8%.

** The United States will not prevent China from developing its economy, but wants it to adhere to international rules, Secretary of State Antony Blinken said in a speech on US strategy towards China.

“We are not looking for conflict or a new Cold War. On the contrary, we are determined to avoid both,” he said.

**Blinken’s speech “is generally interpreted as being on the positive side, given the extremely low expectations on China-US relations,” said Yang Hongxun, an analyst at investment advisory firm Shandong Shenguang.

** Hopes of improved China-US relations and better-than-expected earnings from Alibaba and Baidu fueled buying in Hong Kong-listed tech stocks.

**Alibaba, whose quarterly revenue and profit beat market forecasts, jumped 12% in Hong Kong. Baidu shares jumped 14%, after posting better-than-expected revenue in the first quarter.

**Investors expect more market-friendly policies ahead of Beijing, after Premier Li Keqiang pledged reasonable growth in the second quarter.

** Stocks rose across the board, with commodities, energy and consumer shares among the biggest gainers.

** However, some investors remain cautious. “What is needed is not easing around the edges of these broad policy priorities, but wholesale policy shifts,” wrote Alex Wolf, head of Asia investment strategy at JPMorgan Private. Bank. (Reporting by Shanghai Newsroom; editing by David Evans)