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Saturday, August 20 2022

Hong Kong: New tech crackdown hits Chinese stocks

New tech crackdown hits Chinese stocks
Photo Credit : IANS

Hong Kong:  Chinese stocks fell on Monday as the threat of new Covid restrictions and a renewed regulatory offensive against big tech companies sapped investor confidence, media reports said.

Casinos in the gambling hub of Macao were ordered to close for the first time since February 2020 because of a Covid outbreak, sending shares of their operating companies plunging, while fears of new lockdowns in Shanghai undermined the broader China market, CNN reported.

Adding to the downbeat mood, China’s tech stocks plunged after the country’s antitrust regulator imposed fresh fines on a batch of A-list companies, rekindling fears that Beijing is still not lifting the pressure on the country’s embattled internet giants, CNN reported.

Top government officials had recently signalled an easing of President Xi Jinping’s bruising tech crackdown, and pledged support for the internet sector. The change in rhetoric fueled hopes that Beijing would support the private sector in helping to rescue growth at a time when China’s economic outlook is weak.

But the latest move from the top market regulator sparked a fresh stock sell-off.

Late on Sunday, the State Administration for Market Regulation said it had fined a number of technology companies for violating anti-monopoly rules on the disclosure of transactions.

The watchdog released a list of 28 mergers and acquisitions involving Tencent, Alibaba, Bilibili, Sina Weibo, Lenovo and Ping An Health, which it said had not been reported to the regulator, CNN reported.

Shares of Alibaba sank 5.8 per cent in Hong Kong on Monday, Tencent tumbled 2.9 per cent, while the Hang Seng Tech Index was down about 4 per cent.

The losses were part of a broad drop in Chinese stocks. The top loser among Asia’s major indexes was the Hang Seng Index – down 2.8 per cent. China’s Shanghai Composite Index fell 1.3 per cent, CNN reported.

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