Big Chinese tech stocks lost hundreds of billions of dollars in combined market value in July, reflecting rising investor concern about how the sector will fare under a barrage of regulatory pressure from Beijing.
After days of heavy selling, the market enjoyed a two-day rebound on Wednesday and Thursday in Hong Kong, fueled partly by reassurances by Chinese officials and state media. But many investors remained cautious, and the rally fizzled out Friday, with shares in companies such as Alibaba Group Holding Ltd., Kuaishou Technology, Meituan and Tencent Holdings Ltd. falling again.
Those four companies alone have lost about $344 billion of market capitalization since the end of June, FactSet data shows, or about 20% of their combined worth. The Hang Seng Tech Index, which was launched just over a year ago to capture the performance of Hong Kong’s growing cluster of tech shares, dropped about 2.6% Friday to end the month down 17%.
Investors were digesting the impact of recent actions in areas such as antimonopoly enforcement and data security, when they were caught off guard late last week by policies regarding after-school tutoring, said Alex Au, managing director at Alphalex Capital Management, a Hong Kong-based hedge-fund manager.
“This is unprecedented. A whole industry was almost wiped out overnight. And it just underscores how hard it is to quantify risks tied to investing in China,” he said.
China Tech Selloff Resumes, Adding to Month of Huge Losses Source link China Tech Selloff Resumes, Adding to Month of Huge Losses