COVID-19 Worries and Tech Crash Hit Chinese Shares

Covid-19 Worries and Tech Crash Hit Chinese Shares

COVID-19 Worries and Tech Crash Hit Chinese Shares

Chinese stocks fell on Monday. The threat of new COVID-19 restrictions and a renewed regulatory crackdown on big tech companies have dented investor confidence. Casinos in the gambling hub of Macao have been ordered to close for the first time since 2020 due to the spread of COVID, as well as falling shares of their operating companies. Fears of a new lockdown in Shanghai weighed on the broader Chinese market.

Adding to the downbeat sentiment was a fall in Chinese technology stocks. After the country’s antitrust regulator imposed new fines on A-list companies. That has fueled fears that Beijing is yet to ease pressure on the country’s rival internet giants.

Senior government officials recently hinted at an easing of the president’s tech crackdown. They also promised support for the Internet sector. The shift in rhetoric has raised hopes that Beijing will support the private sector to save growth at a time when China’s economic outlook is weak.

However, the latest move from the market’s top regulator has sparked a fresh sell-off in shares. The State Administration for Market Regulation announced that it had fined several technology companies for violating antitrust rules on the disclosure of transactions. The watchdog published a list of 28 mergers and acquisitions involving companies such as Alibaba, Bilibili, Tencent, Lenovo, Sina Weibo, and Ping an Health.

Tech Crash and COVID-19

Alibaba shares fell 5.8% in Hong Kong. Tencent dropped by 2.9%. The Hang Seng technical index fell about 4%. The losses were part of a broader slide in Chinese stocks. Among the main Asian indices, the Hang Seng Index was the worst loser – down 2.8%. The Shanghai Composite Index fell by 1.3%.

Several Chinese cities have imposed new restrictions after finding cases related to the new Omicron BA.5 subvariant. Shanghai, which has just emerged from a two-month lockdown, has revealed its first BA.5 variant case. 31 Chinese cities are fully or partially locked down or implementing severe movement restrictions affecting 247.5 million people.

Evergrande’s land bondholders rejected the company’s plan to subsequently delay payment of the debt beyond the July 8 deadline. SMIC shares lost 2.3% after reports that the Biden administration is considering banning exports of chip-making equipment to China.

The post COVID-19 Worries and Tech Crash Hit Chinese Shares appeared first on FinanceBrokerage.


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