Tech sell-off sends Hong Kong stocks to biggest slide in 20 weeks as China signals more regulatory curbs
- Hang Seng Index slumped 3.4 per cent for the week as China’s central bank warned more anti-monopoly actions against payments operators
- Market trimmed some losses in Friday trading as a technical gauge signals this week’s sell-off may have been excessive
The Hang Seng Index fell 3.4 per cent this week to 27,344.54 on Friday, with the benchmark hitting a six-month low. The last time the index had a bigger setback was in the week to February 26 when it slumped 5.4 per cent.
The local market climbed 0.7 per cent in Friday trading as the relative-strength technical indicator signaled the sell-off triggered by China’s rapid-fire curbs on national security and data privacy concerns was excessive.
Alibaba Group Holding, the owner of this newspaper, declined 0.9 per cent and Kuaishou Technology crashed 5 per cent. A number of tech giants rebounded from earlier losses with Meituan rising 4.6 per cent and Tencent Holdings gaining 2.3 per cent.
“The HSI is temporarily out of danger” given the technical readings, said Alan Li, portfolio manager at Atta Capital. “The outlook will depend on whether there’s more regulation or whether the market has digested it well.”
Beijing has tightened regulations on the tech industry since scrapping Ant Group stock offering in November, with the latest clampdown focusing on ride-hailing firm Didi Chuxing for national security reasons. The central bank on Thursday said it will continue to scrutinise online payments operators for anti-monopoly practices.
Hong Kong’s pension fund posts 4.5 per cent investment gain in first half, but policy and regulatory challenges lie ahead
Sportswear companies were among the biggest winners on Friday. Anta Sports advanced 6.7 per cent after the company announced a plan to invest 400 million yuan (US$61 million) into digitalisation and seeks to generate 40 per cent from e-commerce sales by 2025. Li Ning rose 4 per cent.
China passes anti-sanctions law to counter punitive action by foreign countries
Among debutants, Shandong Intco Recycling Resources more than tripled to 78.02 yuan while KEDE Numerical Control soared 853 per cent to 105.12 yuan. Zhejiang Yonghe Refrigerant jumped 44 per cent to 9.98 yuan.
Most gauges in other parts of Asia-Pacific declined with stocks in South Korea, Japan and Australia losing 0.6 per cent to 1.1 per cent. US equities slid to near a three-week low in overnight trading.