Hong Kong Stocks Plummet Due to Chinese Tech Companies

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The Hong Kong stock market fell sharply on Monday due to significant price losses among Chinese tech companies.


Fears of a stricter approach to the tech sector in China were further fueled by a report in the British business newspaper Financial Times that Beijing wants to break up payment company Ant Group, part of the large online retailer group Alibaba, and force it to create a separate app for loans.

Alibaba lost 6 percent in the meantime, and the Hang Seng index in Hong Kong was down 2.3 percent. Other large tech companies such as Tencent and Meituan also suffered more than 3 and almost 7 percent losses. The Chinese makers of electric vehicles were also under pressure. According to China’s Minister of Industry and Information Technology Xiao Yaqing, there are too many electric car manufacturers in the country and consolidation in the sector is needed. As a result, BYD and Xpeng fell to 3.5 percent.

Chinese real estate developer Soho China plunged 34 percent after American investor Blackstone withdrew its $3 billion bid for the company. Industry peer China Evergrande Group also fell further. The debt-plagued group, which threatens to collapse, lost almost 6 percent.

In Tokyo, investors took it easy after last week’s strong rally following the announced departure of Japanese Prime Minister Yoshihide Suga. The Nikkei ended 0.2 percent higher at 30,447.37 points. However, Toyota Motor fell nearly 2 percent. The carmaker again adjusted its production plans last Friday and will build even fewer cars in September and October due to shortages of parts and chips.

Competitors Honda and Nissan fell more than 1 percent. However, Shinsei Bank continued its advance, winning 13 percent. The bank already climbed more than 20 percent on Friday thanks to a takeover bid by industry peer SBI Holdings.

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