(Bloomberg) — Chinese technology stocks tumbled by the most in seven weeks, tracking a broader selloff due to tensions in Ukraine, with investors weighing the risk of further regulatory tightening on the sector.
The Hang Seng Tech Index fell 4.3% to close at the lowest since the gauge was introduced in mid-2020. Expectations that the worst of China’s tech crackdown is over were dealt a blow last week, as new government policy prompted a downward spiral in stocks from Friday.
Shares of Alibaba Group Holding Ltd. dropped 6.7% to a record in Hong Kong on Thursday ahead of its earnings release that may show the e-commerce giant’s slowest-ever growth in quarterly revenue. Kuaishou Technology also dragged the tech gauge lower after announcing it will no longer feature goods from Alibaba’s Taobao in the app’s live-streaming from next month.
The Hang Seng Tech gauge breached the lower end of its bollinger band on Thursday, a technical indicator that shows shares are being oversold. The benchmark Hang Seng Index slid to a two-month low, as regional stocks tumbled following Russia’s attack on sites across Ukraine.
The tech selling came despite a state-run newspaper saying the market had overreacted to the new guidance on food delivery platforms. Delivery giant Meituan slid 3.6% Thursday. Kuaishou Technology and its peer Bilibili Inc. lost 5.6% and 8.6%, respectively.
Beijing’s yearlong sweeping crackdown has erased some $1.6 trillion already from technology stocks. Since its February 2021 peak, the Hang Seng Tech Index has more than halved.
A slew of recent measures that unnerved investors started Friday when Beijing required delivery platforms to cut fees. That was followed by the authorities’ warnings against illegal fundraising schemes tied to the metaverse. Earlier this week, China’s anti-graft watchdog said the government held a meeting to draw lessons from an official with alleged ties to Jack Ma’s Ant Group Co.
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