Tencent's return to the top 10 club shows China rebound bets are soaring

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Tencent Holdings entered the club of the world’s 10 most-valuable companies for the first time in six months, reflecting broader investor optimism for Chinese equities as the nation dismantled its stringent Covid Zero policy and refocused on growth. 

The online gaming firm’s shares have risen more than 80% since a low in late October, overtaking oil and gas producer Exxon Mobil Corp. this week to become the 10th biggest stock globally. 

The move also underscores the whipping US stocks have taken over the past year, primarily due to massive monetary tightening by the Federal Reserve. The S&P 500 Index is down about 20% from its record high reached a year ago, and firms like Tesla Inc. and Meta Platforms Inc. have fallen out of the top 10 group.

Chinese stocks are off to a flying start in 2023 after being caught in a downward spiral for much of last year. Key gauges have climbed in all three sessions this year as signs emerged that a crackdown on internet firms was easing and as policy makers took more steps to support the embattled property sector. A growing conviction that the abrupt relaxation of virus curbs will eventually fuel a revival in consumption has aided the rally.

Tech shares are among the biggest gainers this week as China’s approval of a plan by Jack Ma’s Ant Group Co. to raise $1.5 billion for its consumer unit improved sentiment. That’s after President Xi Jinping’s “common prosperity” campaign crushed the sector over the past two years.

Shenzhen-based Tencent commanded market value of about $442 billion as of Wednesday’s close in Hong Kong. Still, that is less than half of the $949 billion it enjoyed at a peak in January 2021.  

--With assistance from Jeffrey Hernandez.

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