Shares in China’s tech companies surged on the year’s final day of trading following big gains on Wall Street for US-listed Chinese businesses, though the rally was not enough to shake off the gloom after a woeful 2021 for the sector marked by a regulatory crackdown.

Hong Kong’s Hang Seng index rose 1.2 per cent on Friday, while the exchange’s tech index climbed almost 4 per cent. China’s CSI 300 of Shanghai- and Shenzhen-listed stocks was up 0.4 per cent.

The rally followed a boost for the Nasdaq Golden Dragon index of large- and mid-cap Chinese companies, which jumped 9.4 per cent on Thursday, its best one-day performance in more than a decade. The rise was driven by double-digit gains for companies including internet group Tencent, search engine Baidu, video-sharing platform Bilibili and New Oriental Education.

The Golden Dragon index has fallen 42 per cent in 2021, as Xi Jinping’s campaign to rein in the country’s tech leaders and the threat of forced delistings from US capital markets took their toll.

Friday’s gains in Asia were also driven by some of China’s biggest tech companies, with ecommerce group Alibaba rising 8 per cent in Hong Kong trading and its rival JD.com advancing about 5 per cent. NetEase, the gaming company, jumped about 4 per cent while food delivery group Meituan added 3.2 per cent.

Dickie Wong, head of research at Kingston Securities, said the trials of the past year had already been priced in and that market “sentiment was coming back” to the Chinese tech sector. “Internet- and technology-related stocks are now trading at extremely low valuations,” he said. “It’s time for a rebound.”

The market enthusiasm came as China reported a slight uptick in manufacturing activity for December despite a property sector slowdown, energy supply woes and coronavirus outbreaks.

The official purchasing managers’ index rose to 50.3, up from 50.1 in November, according to the National Bureau of Statistics, defying analysts’ expectations of a reading of below 50, which would have indicated a contraction.

Friday’s rebound was not enough to erase the Hang Seng’s 2021 losses. The broader index is down 14 per cent in 2021 and the Hang Seng Tech index has lost 48 per cent since a February peak.

The share price of Alibaba, which was fined a record $2.8bn for antitrust violations in April, has almost halved in Hong Kong year-to-date, while Meituan has tumbled more than a fifth, JD.com has fallen almost a fifth and Tencent has shed more than 17 per cent.

Elsewhere, European equity markets were subdued in morning dealings as trading wound down for the year. The regional Stoxx 600 index opened flat, while the UK’s FTSE 100 dropped 0.3 per cent. Germany’s Xetra Dax was closed.

The yield on the benchmark 10-year US Treasury note was flat at around 1.52 per cent, with trading expected to be light throughout the day after The Securities Industry and Financial Markets Association recommended an early market close for the holiday.

Brent crude, the international oil benchmark, edged 0.1 per cent lower to $79.4 a barrel.

Additional reporting by Naomi Rovnick in London