Rising tensions between China and the United States
Fears of further US sanctions on Chinese chipmakers have contributed to the sixth day of losses in Chinese tech equities, which are on track to hit new lows.
According to JD.com, Hong Kong’s Hang Seng Tech Index fell as much as 2% before decreasing to 1.3 percent at 11:00 a.m. local time on Thursday. In the fall, In,c. and Meituan plummeted more than 4% and took over as the market leader.
Imposition of new tougher US sanctions
After rumors on Wednesday that the Biden administration is considering placing tougher sanctions on China’s top chip producer, Semiconductor Manufacturing International Corp., tensions between Washington and Beijing have intensified once more.
This happened after the US Securities and Exchange Commission announced new guidelines that might require Chinese companies registered in the nation, many of which are technology companies, to delist.
The Hang Seng Index sank 1.1 percent to its lowest closure since May 2020, the Hang Seng China Enterprises Index declined 1.4 percent to its lowest level since May 2016, and the S& P 500 Index fell for the third day in a row to its lowest level since March 2020 in the broader market.
“The drop in US tech equities is usually followed by a drop in Hong Kong tech stocks.” People are still concerned about US-China tensions, uncertain regulation of these enterprises, and capital continues to flow out of this industry, according to UOB CEO Kay Hian Ltd. Stephen Leung.