(Bloomberg) — Chinese tech shares extended their declines Tuesday, pressured by rising Treasury yields and signs of Beijing’s continued tight scrutiny of the sector.
The Hang Seng Tech Index fell 1.4% to close at the lowest in two weeks, after dropping as much as 2%. Among the worst performers were Kingdee International Software Group Co. and Alibaba Group Holding Ltd., which dropped to a fresh record low.
The weakness comes after Treasury yields and the dollar jumped as Jerome Powell’s renomination to head the Federal Reserve fueled bets on a quicker exit from monetary stimulus. Adding to the bearish mood was a Monday commentary in the People’s Daily, the Communist Party’s mouthpiece, that called on the authorities to strengthen regulation of online platforms in terms of tax payment.
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“The paring of some risks in the tech sector seems to continue into the Asia session, with rising yields a key concern when it comes to debt cost and valuation for these growth names,” said Jun Rong Yeap, market strategist at IG Asia Pte. adding that ongoing regulatory risks continue to pressure the market.
Bilibili Inc. and Meituan each dropped more than 3%, with the broader benchmark Hang Seng Index closed down 1.2%.
(Updates with closing prices in the 2nd and 5th paragraphs.)
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