(Bloomberg) – Chinese stocks fell as investors took in the latest signals from Beijing of a regulatory crackdown that has hit markets.
The benchmark CSI 300 index fell 0.6% in early trading. The indicator, which last week posted its worst five-day stretch since February, was led down by consumer and energy companies. Hong Kong’s Hang Seng Index fell 0.4%.
On Friday, Beijing followed through with moves to assert greater control over tech companies, continuing a campaign that hit financial markets and led Washington to suspend public offerings of Chinese companies on US exchanges until better disclosures are made. risks. A Politburo meeting chaired by President Xi Jinping promised “improvement” in the approval of overseas listings by companies, Xinhua reported, without giving details.
“Last week’s selloff may be overstated from a short-term technical perspective,” CICC strategists led by Hanfeng Wang wrote in a note. “Parts of the market are ready to go.” Wang added that a tougher stance by US regulators could further encourage Hong Kong trading. Shares of course operator Hong Kong Exchanges & Clearing Ltd. gained as much as 2.9%.
The Industry Information Technology Ministry told 25 of China’s largest hardware and Internet companies, including Alibaba Group Holding Ltd. and Tencent Holdings Ltd., on Friday to conduct internal reviews and rectify issues ranging from the data security to the protection of consumer rights.
In a separate statement, China’s Ministry of Transportation said authorities will intensify supervision of on-demand and on-demand transportation companies, adding that some companies in the industry are operating erratically and disrupting fair competition.
The Hang Seng Tech Index fell 1.2%, and Tencent fell 3.6%.
Investors are grappling with an uncertain regulatory landscape, given the range of industries the government is targeting. From the derailment of Ant Group’s successful IPO to rules curbing monopolistic practices in the internet space, reducing leverage in the property industry, and reforming the tutoring sector, the investor’s playbook keeps changing. quickly.
The steep declines last week were triggered by China’s decision to ban sections of its burgeoning tutoring industry from making a profit. The defeat was severe enough for Beijing to signal its discomfort.
Chinese leaders are expected to step up policy support in the second half of the year to boost the country’s economic growth amid the slowdown, China Daily said in a report on Monday, citing analysts.
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