Hong Kong’s stocks plunge into bear market realm as key index posts biggest weekly slump in 17 months amid China’s crackdowns
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Hong Kong’s benchmark Hang Seng stock index entered a bear market on Friday as a rout in technology shares deepened amid China’s continuing regulatory crackdown on the sector.
The Hang Seng Tech Index dropped 2.5 per cent and slumped by 10.5 per cent for the week, its biggest weekly decline since the week ending on February 26. Year to date, the gauge was down 30 per cent.
In mainland China, the Shanghai Composite Index dipped 1.1 per cent to 3,427.33.
“The most important factor that’s weighing on the market is regulation. People are not sure where the bottom is,” said Castor Pang, head of research at investment services firm Core Pacific-Yamaichi. “There will be more foreign funds dumping technology stocks.”
The once high-flying Chinese technology firms have been hit hard as investors flee Beijing’s regulatory crackdown. Going beyond the initial antitrust policy tightening against technology giants, the government has swiftly moved to reduce the burden of schoolchildren and parents by cracking down on the education technology segment. It has also moved to protect the rights of workers such as those in the food delivery sector.
China’s state media continues to pressure internet platforms. Securities Daily demanded online ride-hailing service firms give up on high profits, after the country’s Ministry of Transport on Wednesday asked these firms to improve their pricing strategies and cap commission rates.
