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Hong Kong stocks fall, tech index stares at fourth monthly loss in five, as Beijing’s scrutiny of overseas IPOs weighs on tech shares

  • The Hang Seng Index retreated 0.8 per cent to 23,086.54, while the Tech Index sank 1.8 per cent for its biggest drop in a week
  • Shares of developer China Aoyuan Group, which was summoned by a Hong Kong court for guaranteeing US$131 million in debt for a subsidiary, crashed to their lowest level since May 2016

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Hong Kong’s Central district. The city’s benchmark Hang Seng Index is on track for a 1.4 per cent loss in December, adding to a 7.5 per cent slide in November. Photo: Felix Wong

Hong Kong stocks fell on Wednesday, ending a five-day winning streak as Beijing’s scrutiny of overseas share sales weighed down Chinese technology stocks in the city.

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The Hang Seng Index retreated 0.8 per cent to 23,086.54, while the Tech Index sank 1.8 per cent for its biggest drop in a week. On the mainland, China’s Shanghai Composite Index lost 0.9 per cent.

Among the Hang Seng’s biggest decliners was Meituan, which fell by 3.3 per cent to HK$216. Alibaba Group Holding, which owns this newspaper, fell 2.6 per cent and Tencent Holdings lost 1.2 per cent.

“Towards the end of the year, people are being cautious. They are waiting for a clearer direction in the market, while keeping an eye on Omicron developments,” said Louis Tse Ming-kwong, managing director at Wealthy Securities.

On Monday, Beijing unveiled regulations that bar companies in sensitive industries from receiving foreign investment, unless they seek a waiver from the government.
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This has sent jitters through the Chinese internet sector, sending the Tech Index to its lowest level since its inception in July 2020. The gauge was on track for a 9.4 per cent loss in December, its fourth monthly loss in five. About US$760 billion in market value has been erased since the end of June, when Chinese authorities launched a cybersecurity investigation into Didi Global.
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