Chinese tech stocks selloff continues driven by investors' fears of more regulat...

Chinese tech stocks selloff continues driven by investors' fears of more regulatory tightening across the whole tech sector- PingWest

Chinese tech stocks selloff continues driven by investors' fears of more regulatory tightening across the whole tech sector

July 27, 2021 11:40 pm

A massive selloff in Chinese technology stocks continue on Tuesday, as China’s widening crackdown on internet companies and education companies raised fears of more regulatory tightening in the near future.

Detail:

The Hang Seng Tech Index in Hong Kong, which include stocks such as Alibaba, Tencent, plummet 8.48%, which its third days of decline.

Among 30 constituent companies, e-commerce giant Alibaba fell 6.35%, its pharmaceutical e-commerce unit Ali Health plummet nearly 14%. Online gaming and social-media giant Tencent fell 9%. The selloff pushed Tencent’s market value down to about USD544 billion. NetEase, Tencent’s biggest rival in domestic online gaming market, fell even worse by 13.07%

Search engine and artificial intelligence giant Baidu dropped 7.31%. JD Health, the health-care arm of Chinese second largest e-commerce platform JD.com, was the worst performer whose share price plummet 22.09%, its parent company JD dropped nearly 10%.

The tech stocks sell off was sparked by a Beijing’s move over the weekend to curb academic tuition group from making profit in order to ease financial burden on families.

Chinese regulator has also issued a guideline to rectify food delivery platform practically Meituan, asking the platform to guarantee driver’s benefit by improving riders’ salary package and ensuing their basic social and medical insurance.

Shares of Meituan plummet nearly 18% on Tuesday, continuing a downward trend.

Context:

China’s ongoing crackdown on tech companies has been continuing for nine months, starting from November, 2020 when Chinese regulator summoned Alibaba’s affiliate Ant Group for financial regulatory issues and halted Ant’s giant IPO.

China’s clampdown has spanned issues such as data security, monopolistic behavior and financial stability, rectifying the businesses of tech companies including Alibaba, Tencent, Didi Chuxing, Meituan Dianping, Ant Group.  

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