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Hong Kong stock market
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Tech stocks sink 3.7 per cent in Hong Kong as Chinese regulators slam market with big stick

  • Hang Seng Index fell 2.9 per cent for an eighth day of losses, erasing all of this year’s gains amid tightening regulations on tech companies
  • Tech stocks crashed by another 3.7 per cent to a nine-month low, bringing this week’s beating to at least US$92 billion

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A sell-off in Chinese tech stocks in Hong Kong has erased US$616 billion of market value from its February 17 peak, more than the size of Thailand’s equity market: Photo: AP
Iris Ouyangin Hong KongandZhang Shidongin Shanghai
Hong Kong stocks tumbled for an eighth day while the city’s tech stocks hit a nine-month low, with investors stunned by China’s regulatory curbs on the sector. Signs of potential monetary easing have failed to lift market sentiment for now.

The Hang Seng Index fell 2.9 per cent to 27,137.51 on Thursday, erasing all its gains this year as it reached the lowest since December 29. The eight-day slide matched the longest losing streak since June 10. The Shanghai Composite Index declined 0.8 per cent to 3,525.50.

Tech stocks sank by 3.7 per cent to a level not seen since October 5 as investors nursed the biggest one-day drop in four months. Meituan plunged 6.4 per cent and Alibaba Group Holding suffered 4.1 per cent. Other notable losses included Tencent Holdings, Bilibili and JD.com, all sliding by 3.6 to 7.3 per cent.

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“The market needs to re-evaluate the sector on the backdrop of all these new regulations,” said Luo Di, a Shanghai-based portfolio manager at UBS Asset Management. “Their valuation will definitely be revised downward” to reflect the changes, Luo added.

Since China surprisingly moved on Sunday to bar Didi Chuxing from the nation’s app stores, the Hang Seng Tech Index has lost US$92 billion in market capitalisation, according to Bloomberg data, with Tencent surrendering all of its gains in 2021. The tech index has lost US$616 billion since its February 17 peak, more than the size of Thailand’s equity market.
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The government on Wednesday fined 22 companies for market violations, including Alibaba, the owner of this newspaper. On Thursday, five authorities led by the State Administration for Market Regulation issued implementation rules for fair competition review.
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