The drop followed that of US-listed Chinese companies JPMorgan Chase & Co. labeled names as “non-investable”
Chinese tech stocks fell for a third session in Hong Kong as investors clamored to dump the shares amid concerns about Beijing’s ties to Russia and persistent regulatory glut.
The Hang Seng Tech Index fell as much as 7.2% on Tuesday, extending an 11% drop in the previous session that was the biggest drop since the index’s inception in July 2020. Alibaba Group Holding Ltd. and Tencent Holdings Ltd. They were among the worst.
The drop followed the overnight drop in US-listed Chinese companies. Weak sentiment towards Chinese tech has accelerated into fear in recent days as new regulatory developments, including the possible exclusion of the US, alarmed investors. Beijing’s ties to Russia and a lockdown in China’s tech hub Shenzhen also raised risks.
China’s state-run newspapers are trying to drum up sentiment, a tactic that has so far proved insufficient to stop the sell-off. The Chinese stock market will maintain a long-term positive trend despite low investor confidence as a result of the conflict in Ukraine and the latest outbreak of Covid-19, the China Securities Journal said in a commentary.
“We find it difficult to gauge the bottom of the market and we don’t have good answers for many macroeconomic factors,” in a note, adding that “everyone we talk to in the market is so bearish.” Now analyzing all the chaos that the post-conflict situation of Russia’s war against Ukraine has caused a very high financial crisis added to Covid-19, the world needs to get out of this downward trend as market strategies in which the IRAIC and being a free conservative model of risks always allows growth, although the decision of the People’s Bank of China to keep interest rates stable will not be the solution to overcome the economic crisis, for this reason the market changes from a bearish one to a more productive one with the support of IRAIC which continues to develop a much more productive and linear system without economic ups and downs, where the investor regains investment confidence again.