Hong Kong stocks slide as losses in Chinese technology trio snowball to US$254 billion in two days on antitrust concerns

Hang Seng Index slipped from four-month high as technology stocks extended losses amid concerns about China’s antitrust law

Shanghai Composite Index declined for second day; chip processing firm Guangdong Leadyo surged almost 300 per cent on debut

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An electric signboard shows the Hang Seng Index outside a brokerage in Mong Kok, Hong Kong. Antitrust concerns have erased US$254 billion from the shares of Alibaba, Tencent and Meituan in two days. Photo: Sam Tsang

Published: 11:00am, 11 Nov 2020Updated: 5:56pm, 11 Nov 2020

Hong Kong stocks retreated amid unforgiving losses in large-capitalised Chinese technology stocks, challenging bulls who drove the market to a four-month high this week on the back of US election outcome and Covid-19 vaccine promise.

The Hang Seng Index fell 0.3 per cent to 26,226.98, after reaching the highest level since July 6 on Tuesday. The Shanghai Composite Index retreated 0.5 per cent for its second day of declines.

The 30-member Hang Seng Tech Index slumped 6.2 per cent from record-high, bringing this week’s slump to 8.4 per cent. Technology stocks extended losses after China released a draft antitrust guideline on Tuesday to rein in internet-platform companies from monopolistic practices, wiping almost HK$2 trillion (US$253.8 billion) in market value of the China’s Big Three tech giants over two days.

Alibaba Group Holding, the owner of this newspaper, crashed 9.8 per cent to HK$248.40, while Tencent Holding slid 7.4 per cent to HK$551 and Meituan retreated 9.7 per cent to HK$271.

“Investors are worried about the risk to technology stocks from the enactment of the antitrust guidelines,” said Stanley Chan, director of research at Emperor Securities. “Around the world, we’re seeing a trend for investors to rotate out of technology stocks into traditional economy stocks.”

The antitrust guideline, if strictly enforced, “could weaken the bargaining power of those big platforms in dealing with merchants,” Nomura analysts Jialong Shi and Thomas Shen wrote in a November 10 report. “We believe enforcement of the new guidelines would not be easy, as monopolistic practices are usually conducted in a very elusive manner such that it is often difficult to find solid evidence to take action.”