A gauge of China tech shares traded in Hong Kong extended gains from a May low to 20% on expectations of further stimulus for the nation’s flagging economy.

Hong Kong’s Hang Seng Tech Index jumped as much as 3.3% on Thursday, led by XPeng Inc. after plans by Volkswagen AG to invest in the Chinese electric vehicle maker. Its peers including Nio Inc. and Li Auto Inc. also gained.

The rally — which put the tech index on track to enter a technical bull market — come on the heels of the Politburo meeting earlier this week, which pledged more support to boost consumption and the ailing real-estate sector.

“Market sentiment is improving with clearly supportive rhetoric from the government over the past week,” said Vey-Sern Ling, managing director at Union Bancaire Privee. “VW’s investment in XPeng also boosted investor appetite for the EV sector.”