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Scottish Mortgage and fellow China backers rebound on reports of Beijing regulatory easing

Shares in Scottish Mortgage Investment Trust PLC (LSE:SMT) and many China-focused investment trusts bounced back on Thursday as China’s big tech companies staged a comback. 

Earlier in the week, Tencent, Meituan and other technology companies in the People’s Republic had seen sharp declines as regulators widened their recent tech crackdown. 

As research this week showed, many London-listed investment funds are heavily invested in the fast-growing Chinese tech scene. 

On Tuesday, the Hang Seng stock index rose 3.3% and the Shanghai Composite over 1.5%, led by Tencent Holdings Inc rising 10%, Meituan jumping 9%, Alibaba up over 7% and others like and Bilinili making double-figure gains.

Market analyst Danni Hewson said after the debacle involving a big sell-off in China-related stocks earlier in the week, the stocks were climbing on the back of “chatter that Beijing wouldn’t be overtly draconian towards Chinese companies with listings in foreign markets if they kept in line with local laws”.

The Scottish Mortgage trust, which has made its name as a backer of big tech in the US and increasingly in China, rose 1.5%, as did Baillie Gifford China Growth Trust PLC, while Fidelity China Special Situations PLC (LSE:FCSS) rose 1%. 

Bigger rises were seen at JPMorgan China Growth & Income PLC, which has the biggest exposure to Tencent and jumped over 6%, while JPMorgan Asia Growth & Income PLC was up over 3%.

Templeton Emerging Markets Inv Trust plc, however, with one of the largest stakes in Tencent among its peers, was in the red and the shares are around their lowest since early December.

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