Tech stocks sink in Hong Kong on China’s tightening curbs as Tencent erases 2021 gains

Hang Seng Tech Index tumbled 2.3 per cent to the lowest level in seven weeks as Tencent erased all of the advance this year

China’s powerful cyberspace agency has ordered for more reviews hours after taking ride-hailing app Didi Chuxing off the nation’s app stores

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A man walks past an electronic board displaying local stock prices and indexes outside at a brokerage in Beijing. Photo: AP

Published: 10:29am, 5 Jul 2021Updated: 5:24pm, 5 Jul 2021

Chinese tech stocks sank to a seven-week low in Hong Kong trading after China’s powerful cybersecurity watchdog ordered more reviews into internet-platform operators for security and privacy breaches, while a private report added to signs of economic slowdown.

The Hang Seng Tech Index slumped 2.3 per cent for a fourth straight day of declines, reaching the lowest level since May 17. The gauge fell 4.2 per cent last week, the most in seven weeks. Baidu and JD.com each lost more than 2 per cent while Kuaishou tumbled almost 6 per cent.

Tencent Holdings plunged 3.6 per cent to HK$554, erasing all of its 2021 gains. Meituan crashed 5.6 per cent to HK$287 while Alibaba Group Holding, the owner of this newspaper, tumbled 2.8 per cent to HK$206. The slump has erased US$540 billion of market value of the trio from the peak on February 17 to last Friday, according to Bloomberg data.

The Hang Seng Index lost 0.6 per cent to 28,143.50, following its worst week since February. In mainland China, the Shanghai Composite Index rose 0.4 per cent, the CSI 300 Index added 0.1 per cent. Tech-heavy ChiNext gained 0.6 per cent.

“The announcements came relatively suddenly, that the scrutiny was extended to data security from antitrust,” said Willer Chen, analyst at Forsyth Barr in Hong Kong. “The impact is negative and more on sentiment, although the impact of actual business and operations is not big. Investors think there are still regulatory uncertainties and it‘s hard to grasp its future direction.”

The Cyberspace Administration of China on Monday launched cybersecurity reviews into three more companies, including US-listed online recruiting service Kanzhun, and the “Uber-for-trucks” operator known as Guiyang Huochebang Technology and Full Track Logistics Information. The latter two are part of newly-listed Full Truck Alliance.

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