Tech stocks face US pressure

Global oil traders are fixated on the next milestone in China's economic recovery, when travelers pack their bags and head to the airport for the Golden Week holiday in early May.

Some 170 million Chinese holidayed abroad in 2019, before the pandemic struck. That figure sank to less than 9 million last year at the height of China's lockdowns. The likelihood of dramatically more air travel explains why jet fuel consumption in China is widely seen as the single biggest driver of world oil demand growth this year, according to JP Morgan Chase.

Overseas ticket searches for Golden Week are 120 percent of the level in 2019, state media reported, citing an estimate from Trip.com (9961). As of April 18, actual bookings were more than 10 times that of last year, the Securities Daily reported.

"Mainland China's domestic jet fuel demand has almost fully recovered, while international jet fuel demand has recovered to close to 70 percent of pre-Covid levels," said Fenglei Shi, a director covering Chinese oil markets at S&P Global Commodity Insights. As such, it's possible that Golden Week could mark a near-complete recovery in China's total consumption of the fuel, she said.

The mainland's total number of passenger flights should nearly equal pre-pandemic levels in the second quarter, according to the China Air Transport Association. But the international component of that will still be less than half what it was - and overseas flights account for about 30 percent of the nation's jet fuel consumption,.

Macquarie estimates that Chinese jet fuel demand will rise by 430,000 barrels a day this year over last. That's almost half of the increase of 900,000 barrels forecast for Chinese oil demand as a whole.

Staff reporter and Reuters

Investors are advised to be cautious over China concept stocks, including the many tech shares as the US government plans to limit investment in China with American technology giants results coming up.

Many tech shares saw their American depositary receipts fall last Friday after the decline in Hong Kong. Tencent's ADRs dipped to US$44.1 (HK$ 346.18) apiece, 0.9 percent lower than the closing price of HK$349.2 per share in the city last Friday. And Alibaba's shares in New York dropped to US$89.13, down by 0.6 percent from HK$87.95 in Hong Kong.

The slide in the American market followed a 3.13 percent decrease in the Hang Seng Tech Index on the final trading day of last week, with Alibaba (9988) losing 4.14 percent and Tencent (0700) retreating 2.18 percent in Hong Kong.

Meanwhile, the possible limitations from the US government could keep Chinese concept stocks under pressure. President Joe Biden aims to sign an executive order in the coming weeks that will limit investment in key parts of China's economy by American businesses, people familiar with the internal deliberations said.

Further, the market is eagerly awaiting the upcoming financial results released by American technology giants to see if they can surpass the already-lowered first-quarter estimates.

Technology earnings are seen falling 14.4 percent in the first quarter. Communication services companies, including Meta Platforms and Alphabet, are expected to post declines of 12 percent, according to Refinitiv data.