(Bloomberg) — Chinese tech stocks trimmed gains as a Wall Street Journal report on fresh curbs facing the online video industry stoked fresh concern about Beijing’s regulatory crackdown.
The Hang Seng Tech Index was up 0.9% as of 2:39 p.m. in Hong Kong, having earlier risen as much as 2.3%. Beijing is preparing new regulations on the live-streaming industry including a daily cap on tipping, according to the WSJ report. Key player Kuaishou Technology slid as much as 8.3%, reversing an earlier rally spurred by an earnings beat.
The latest regulatory development sours sentiment as investors were expecting China to loosen its grips following Vice Premier Liu He’s mid-March pledge to stabilize capital markets and end crackdowns on private enterprise. The Hang Seng Tech Index has jumped more than 30% from its trough two weeks ago.
“This will create pressure for live streaming firms as they share a proportion from digital tips,” said Willer Chen, analyst at Forsyth Barr Asia Ltd. “If true, this will be a big regulation on live-streaming hosts. A great number of leading hosts earn way higher than the proposed 10,000 yuan daily cap.”
Sentiment has also been fragile following a number of earnings miss by technology companies, including Tencent Holdings Ltd. and Alibaba Group Holding Ltd. The 30-day volatility for the Hang Seng tech gauge is at a record high as traders look for more clues on the sector’s earnings and regulatory outlook.
Meanwhile, a rally in Chinese financial and property stocks saw the benchmark CSI 300 Index jump as much as 2.8%, the most since March 16. The smaller growth-heavy ChiNext Index climbed as much as 3.8%, with heavyweight Contemporary Amperex Technology Co. — the world’s biggest manufacturer of electric-vehicle batteries — surging more than 6%.
READ: China’s CSI 300 Index Jumps 2.8%, Set for Best Day in Two Weeks
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