Hong Kong stocks fell for a sixth day as investors dumped Chinese tech giants amid mounting concerns about regulatory risks.
The Hang Seng Index slipped 0.3 per cent to a seven-week low of 28,072.86 at the close of Tuesday trading, The longest losing streak in a month lopped off at least US$172 billion of value off the index members as the benchmark hit a seven-week low.
The Shanghai Composite Index and the Shenzhen Component Index lost 0.1 to 0.3 per cent.
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Chinese technology companies suffered a fifth day of beating, with the sector barometer losing 0.9 per cent. Alibaba Health Information and Sunny Optical and Ping An Healthcare were loss leaders among Hang Seng Tech Index members, retreating by more than 4 per cent each.
Beijing’s tightening grip and regulatory power on Big Tech is sending a chill among investors in Chinese internet-platform operators traded in Hong Kong and the US. An antitrust probe into fintech giants has now progressed into the cybersecurity arena, as regulators probe security and privacy breaches among ride-hailing firms like Didi Chuxing and Full Truck Alliance.
“The increased regulation on internet companies are affecting sentiment, especially when the tech weightings in Hang Seng Index is relatively big,” said Ernie Hon, head of research at Essence International Securities in Hong Kong. Concerns about China’s slower economic growth are also weakening support for stocks, he added.
Health care firms also slipped with tech after China’s medical industry regulator issued a guidance on clinical research and development of medicine for curing cancer, which could toughen standards in drugs earmarked for state medical plans.
WuXi Biologics plunged 8.4 per cent while CSPC Pharmaceutical fell 4.2 per cent and Sino Biopharmaceutical declined 2.7 per cent. On the mainland, Shanghai Fosun Pharmaceutical and Topchoice Medical plummeted by more than 9 to 10 per cent each.
Elsewhere, Suning.com surged by the upper daily cap of 10 per cent to 6.15 yuan in Shenzhen. The stock resumed trading today after announcing a US$1.4 billion rescue plan by a fund controlled by the Jiangsu government and the Nanjing city government. Alibaba Group Holding and Xiaomi Corp are also among the fund investors.
Alibaba, the owner of this newspaper, gained per cent while Xiaomi lost 0.2 per cent in Hong Kong. The rescue fund will buy a 16.96 per cent stake in Suning.com, according to an exchange filing late Monday.
Three stocks began trading on Tuesday. Decai Decoration rose 44 per cent from its offering price while Inno Laser Technology jumped 383 per cent and Yantai Ishikawa Sealing Technology surged 213 per cent.
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