As investors wait for Beijing’s next move, the sell-off of Chinese technology stocks is suspended

China stock market dynamics

China’s stock market held steady on Wednesday as investors took a breath after Beijing’s crackdown on education and technology companies triggered a massive sell-off this week.

Hong Kong’s benchmark Hang Seng Index rose 0.5% in early trading After rolling Over 5% on Tuesday. The China CSI 300 Index rose 0.4% after falling 3.5% in the previous trading day.

As Chinese technology stocks plummeted on Tuesday, Internet conglomerate Tencent announced that it had stopped the registration of its flagship WeChat app, “in order to comply with all relevant laws and regulations.” The company’s share price fell 2.5% on Wednesday after falling 10% the day before.

Global investors are increasingly concerned about the Chinese authorities’ extensive crackdown on many industries.On Friday, a leaked memo hinted at China’s $100 billion private education industry, Threatening to wipe out billions of dollars in foreign investment. Regulatory changes were confirmed over the weekend.

Overnight, the Nasdaq Golden Dragon China Index of Chinese technology stocks listed in the United States fell more than 5%, making the benchmark fall more than 19% since the memo was leaked.

The e-commerce group Alibaba and the delivery company Meituan, founded by billionaire Jack Ma, were almost unchanged on Wednesday after diving in the previous trading day.

Traders said that any gains in Hong Kong on Wednesday come from short covering, that is, investors who bet on falling stocks buy back stocks to end trading.

Andy Maynard, a trader at investment bank China Renaissance Capital, said: “You can see the pollution of this fear. China’s selling is domestic and foreign.”

After the ride-hailing company Didi Chuxing conducted a $4.4 billion initial public offering in New York last month, regulatory pressure from Beijing has rapidly escalated in recent weeks.Although Didi continues to go public Private warning The Chinese authorities do not do this.

Senior leaders in Beijing have Require overhaul How Chinese companies are listed overseas and what are the plans of the national cybersecurity regulator Review all overseas listings For national security reasons, a group with more than 1 million users.

“China’s policy turnaround is structural,” said Richard Jesenga, chief economist at ANZ Bank.He said that Beijing’s latest move to control the country’s fast-growing technology industry has Tremendous influence Because of the slowdown in China’s economic growth.

“If technology cannot sustain China’s high growth rate, the focus will shift to manufacturing and consumption,” Yetsenga added. “But both face their own structural challenges.”

Elsewhere in Asia, Japan’s Topix Index fell 0.7%, and Australia’s S&P/ASX 200 Index fell 0.4%.S&P 500 index futures are flat before the Federal Reserve (Federal Reserve/FED) Policy meeting Later in the day.

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