Tech stocks sink in Hong Kong in worst sell-off since mid-November amid valuation jitters, rotation to reflation plays

The Hang Seng Index slid 1.1 per cent to 30,319.83 on Monday as tech stocks as a group plunged by most since mid-November

HSBC advanced 2.1 per cent on dividend hopes as a rally in banking stocks softened market sell-off

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Chinese technology stocks suffer their biggest sell-off in Hong Kong since mid-November amid valuation concerns. Photo: Xinhua

Published: 11:05am, 22 Feb 2021Updated: 5:33pm, 22 Feb 2021

Hong Kong stocks slumped, dragging the benchmark index down from near the highest in more than two years, as technology stocks suffered their worst beating in more than three months. HSBC gained, tempering the market sell-off.

The Hang Seng Index fell 1.1 per cent to 30,319.83 at the close of trading on Monday, reversing a 0.5 per cent gain during the day. The Shanghai Composite Index slipped 1.5 per cent to 3,642.44 to cap its worst day since January 28.

The Hang Seng Tech Index tumbled 5.5 per cent as 30 of its 31 constituents registered losses. The sell-off was the most since a 6.2 per cent slide on November 11 in the week after a clampdown on fintech companies. A similar barometer in Shenzhen’s ChiNext market fell 4.5 per cent.

Meituan crashed 5.5 per cent to HK$400.20 while Alibaba Group Holding, the owner of this newspaper, dropped 2.5 per cent to HK$250.60. Tencent Holdings retreated 3.7 per cent to HK$713.50. Xiaomi Corp added to the pressure as the stock declined 5.4 per cent to HK$29 after denying Chinese media reports that it was planning to produce electric vehicles.

Schroders expressed a cautious view on internet or e-commerce companies, given high valuations and regulatory risks, “which could cloud things for the sector in the near term,” the UK money manager said in an emailed note on February 18.

“The whole theme is now about reflation and economic reopening,” said Alex Wong, a director at Ample Finance Group. “People are switching into laggards and selling [tech] stocks which have recorded big gains” while southbound funds are expected to support local shares for some time, he added.