The sudden bounce mid-morning came as China’s economic data beat estimates, lifting sentiment and suggesting resilience before the country’s Covid-19 outbreak forced lockdowns in major cities. Broader benchmarks such as the Hang Seng Index and CSI 300 also pared losses after the data dump.

“Market is oversold and investors are looking for bargain hunting in the context of expected fiscal stimulus and monetary easing as Covid cases are rising,” said Margaret Yang, a strategist at DailyFX, said by phone.

Sentiment toward Chinese tech had morphed into fear in recent days as new regulatory developments including possible U.S. delisting and Beijing’s ties with Russia alarmed investors.

The rout has pushed the valuation of MSCI China Index versus its global peers to a record low. JPMorgan Chase & Co. analysts have even labeled some Chinese internet names as “uninvestable”.

Earlier in the morning, the People’s Bank of China’s kept interest rates on its one-year policy loans steady, even as a majority of surveyed economists expected a cut. The central bank also injected a net 100 billion yuan ($15.7 billion) into the financial system.

“Markets were initially disappointed by the MLF rate hold, but more positive after economic data beat expectations across the board southbound stock connect has been relatively strong, indicating bargain hunting,” said Marvin Chen, a strategist at Bloomberg Intelligence.

China’s state-run papers are trying to talk up sentiment, a tactic that’s so far proved insufficient in stemming the selloff. The Chinese stock market will remain on a positive trend over the long term despite low investor confidence resulting from the conflict in Ukraine and the latest Covid-19 outbreak, China Securities Journal said in a commentary.