Hong Kong shares fall nearly 4% as tech sector hammers

HONG KONG — Shares in Hong Kong fell nearly 4% on Monday as tech companies were hit by concerns over a Chinese crackdown on the sector and the country’s tech hub Shenzhen was quarantined.

At the break, the Hang Seng index was down 3.81%, or 782.32 points, at 19,771.47, falling below 20,000 for the first time since mid-2016.

The sale is part of a global retreat fueled by Russia’s invasion of Ukraine, which has boosted oil prices and is expected to ignite a fire amid already high inflation.

The crisis has further rattled Hong Kong investors who have also had to deal with China’s regulatory crackdown on the private sector, with once-flying tech companies most often in the crosshairs.

The Hang Seng Tech index lost more than 7% on Monday, with market heavyweight Alibaba down about 8% and Tencent down more than 4%.

News on Sunday added to the pain that China has brought Shenzhen’s 17 million people under lockdown as it battles a spike in Covid-19 cases across the country.

Public transport has been suspended and authorities have told all residents to stay at home, with the lockdown set to last until March 20 while three rounds of mass testing are carried out.

The move led Foxconn, which is a key Apple supplier and maker of iPhones, to halt operations in the city in response.

The Taiwanese company, also known as Hon Hai Precision and which has its Chinese base in the city, did not say how long it would keep its factory closed, but had relocated production to other sites.

The sale follows a rout of Chinese companies listed in the United States last week that was sparked by concerns about a crackdown by authorities there.

Five companies have been ordered to comply with U.S. Securities and Exchange Commission audit requirements or face delisting from Wall Street.

The first group of companies named on a list published by the SEC on Thursday could soon be followed by all Chinese companies listed in New York, none of which currently comply with US regulations.

It came as Bloomberg News reported on Friday that China’s leading carpooling company, Didi Global, had suspended plans to register in Hong Kong as it sought to appease Beijing over its handling. user data.

“At this stage, we still see the tech space as very vulnerable,” said Jun Li of Power Pacific Investment Management. “It is very difficult to assess the risk profile at this stage.”

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