(Bloomberg) — Chinese tech stocks trimmed gains as reports over fresh curbs facing the online video industry stoked renewed concern about Beijing’s regulatory crackdown.
The Hang Seng Tech Index ended up 0.3% 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 a Wall Street Journal report. Later during afternoon trading, China’s regulators pledged to eradicate crimes including tax evasion on such platforms.
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. Key player Kuaishou Technology fell 6.2% on Wednesday, reversing an earlier rally spurred by an earnings beat.
“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. The index has jumped more than 30% from its trough two weeks ago.
Meanwhile, a rally in Chinese financial and property stocks saw the benchmark CSI 300 Index gain 2.9%, the most since March 16. The smaller, growth-heavy ChiNext Index climbed 4%, 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
(Updates with closing prices and Chinese authorities’ announcements.)
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