(Bloomberg) — Alibaba Group Holding Ltd. shares slumped as much as 4.3% to a record low in Hong Kong on Thursday, extending a selloff in Chinese technology giants after Beijing hit the industry with a fresh round of regulations.
Shares dropped after China said it is studying separate proposals to further ensure the rights of drivers who work for online companies and to step up oversight of the live streaming industry.
Sentiment for China’s largest advertising platform also soured after peer Tencent Holdings Ltd. executives said in a post-earnings conference call that the government can make fairly substantial changes to how companies use data for advertising.
The crackdown wiped off nearly $1 trillion of market value from Chinese shares listed globally last month as it quickly expanded from antitrust and e-commerce concerns to private tutoring, data security and online content. Alibaba’s shares have slumped 29% this year compared to a fall of just under 7% for the Hang Seng Index.
The selloff has prompted some global fund managers including Cathie Wood to dump their holdings in Chinese stocks over the past few months. In fact, some investors are questioning allocations toward Chinese assets altogether.
The new moves are incremental but investors are not at a point where they “will cease to price in any more additional policies,” said Shine Gao, fund manager at Taicheng Capital Management Co. “Even if the worst is over for big tech firms in terms of new regulations, we should expect that their growth won’t be what it was.”
The Hang Seng Index fell as much as 2% Thursday. The Hang Seng Tech Index dropped to the lowest since its July 2020 inception.
Tencent reversed earlier gains of as much as 3.4% to trade down 1% as midday in Hong Kong as its warnings for more regulatory curbs on the industry overshadowed second quarter earnings that beat estimates.
READ: Tencent Warns of More China Tech Curbs After Growth Sputters
Among other tech names, food-delivery giant Meituan fell as much as 7.2%, following a similar drop in ride-hailing company DiDi Global Inc. in the U.S.
(Updates to add more context)
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