US stocks rise as investors look for tech bargains

US stocks rose in morning trade in New York on Thursday as investors sought to snap up some bargains in tech stocks, looking past a surge in coronavirus cases in China.

Optimism for US markets soothed investors’ fears earlier in the day in Europe over the impact on the global economy of an increase in coronavirus cases in China, just as the country eases its pandemic policies. Crude oil and commodities-related stocks remained weak.

The benchmark S&P 500 rose 1.9 per cent and Nasdaq Composite 2.7 per cent as investors bought tech stocks such as Tesla, Netflix and Apple.

Shares in Tesla jumped as much as 8.2 per cent in the opening moments, having dropped more than a third this month on fears that the electric carmaker’s chief executive Elon Musk was distracted by his purchase of Twitter. Apple, which rose 3.2 per cent on Thursday, has fallen 12 per cent in December as investors fret about disruptions to its manufacturing operations in China. Netflix climbed 6.3 per cent.

Before the market opened Bespoke Investment Group, a research group, pointed out that the tech-heavy Nasdaq was down 10.9 per cent in the month to date.

“If the declines for the Nasdaq hold, this will be its worst December on record since 1971,” it said. “Tax-loss selling, and no buyers in sight, is likely playing a part in this recent weakness, and that pressure will end when the calendar turns.”

The gains in the US bolstered benchmarks in Europe, which were affected by the thin trading volumes of the holiday period. The Stoxx 600 finished 0.6 per cent higher. The commodities-heavy FTSE 100 recovered morning losses to close up 0.2 per cent.

In commodities markets Brent crude, the international oil benchmark, recovered from its earlier lows but remained 1.2 per cent lower while WTI, the US counterpart, was down 1.1 per cent.

The yield on the 10-year US government bond fell 0.05 percentage points to 3.83 per cent. Yields fall when prices rise.

Hong Kong’s Hang Seng index closed down 0.8 per cent, while China’s blue-chip CSI 300 index fell 0.4 per cent as major cities across the country were faced with rising Covid-19 cases.

Thursday’s declines came after China’s National Health Commission said it would drop quarantine requirements for inbound passengers from January 8, even as the country endures its worst Covid outbreak. The announcement was the latest easing of the government’s punishing zero-Covid policies, which have hit economic growth.

A growing number of countries, including the US and Italy, have announced that they will require negative Covid tests for air passengers travelling from China.

Hong Kong also further eased its pandemic restrictions on Wednesday, scrapping PCR tests on arrival to the Asian financial hub, as well as limits on dining in restaurants.

The Hang Seng Tech index was down 2.5 per cent after the Nasdaq Golden Dragon index, which tracks Chinese tech groups trading in the US, closed on Thursday down more than 3.8 per cent.