US officials deliberated but ultimately decided against banning American investment in Alibaba Group Holding Ltd. and Tencent Holdings Ltd., a person familiar with the discussions said, removing a cloud of uncertainty over Asia’s two biggest corporations.

See: OCBC maintains Baidu at 'buy', says company is 'on track to benefit from recovery'

The Treasury Department blocked a Pentagon effort to add the two internet firms on grounds they aided the military, the person said, asking not to be identified discussing private talks. Officials also debated blocking search leader Baidu Inc. but dropped the plan, the person added. Alibaba’s Hong Kong stock climbed as much as 3.9% while Tencent rose almost 5% on news of the reprieve, which was first reported by the Wall Street Journal. Their dollar bond spreads tightened Thursday morning.

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