Tech scare sends Hong Kong stocks reeling in week as Chinese tutoring firms crash

Hang Seng Index completed a losing week as Meituan, Alibaba Health dragged stocks lower with market wary of widening tech clampdown

China Telecom slipped after winning approval for a plan to raise about US$8.4 billion from a stock offering in Shanghai

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Speculation about tightening tech regulations sent Chinese online education firm reeling. Photo: Shutterstock

Published: 11:02am, 23 Jul 2021Updated: 5:10pm, 23 Jul 2021

Hong Kong stocks capped a weekly loss on lingering concerns about Beijing’s crackdown against internet-platform companies and as a surge in Delta variant cases clouds global economic recovery outlook. Chinese online education stocks crashed.

The Hang Seng Index retreated 1.5 per cent to 27,321.98 at the close, extending the weekly decline to 2.7 per cent. China’s Shanghai Composite Index fell 0.7 per cent, trimming the weekly gain to 0.4 per cent.

Meituan and Alibaba Health Information Technology dropped at least 2.4 per cent as China stepped up its scrutiny on illegal practices after putting Didi Chuxing under a cybersecurity review this month. China’s market regulator late Thursday published the first batch of anti-competition cases, while rife speculation about online education firms unnerved onshore traders.

“Part of a relentless domestic big-tech crackdown by China appears to be weighing on sentiment,” said Jeffrey Halley, an analyst at Oanda.

Local traders ignored overnight gains in US equities by keeping track of Beijing’s anti-competition measures and a resurgence in Covid-19 cases, which has fuelled a flight to safety. The latest US economic reports were mixed as sales of previously owned homes and jobless claims rose.