Hong Kong: Stocks hit 7-week low on anti-trust worries, tech sell-off

[HONG KONG] Hong Kong stocks fell on Tuesday to a seven-week low, tracking an overnight tech sell-off on the Wall Street, while persistent anti-monopoly fears also weighed on tech giants listed in the Asian financial hub.

The Hang Seng index fell 2.0 per cent to 28,013.81, lowest closing since March 25, while the China Enterprises Index lost 2.1 per cent to 10,431.55 points.

Leading the retreat, the Hang Seng tech index slumped as much as 4.5 per cent to a six-month low before ending down 3 per cent, dropping more than 30 per cent from a record high hit on Feb 18.

Tech giants Tencent and Alibaba slipped 1.8 per cent and 3.5 per cent, respectively.

The retreat came after China's State Administration for Market Regulation said on Friday that it would continue to promote rectification of platform companies.

Analysts and traders said Tuesday's tech sell-off was mainly due to lingering worries over anti-monopoly regulations and a tech correction in the US stock market.

Wall Street closed lower on Monday, as inflation jitters drove investors away from market-leading growth stocks in favour of cyclicals.

Panic selling in tech shares is triggered by fears of deepening anti-trust probes, said Zhong Long, fund manager at Chinese hedge fund Oriental Ze Jin.

"Impact of the anti-monopoly campaign has not yet been fully priced in... For Alibaba, the shoes have dropped. But for others, including Meituan and Tencent, it's far from over. And if you look at similar campaigns in the US, it's not just about fines. Sometimes it would lead to break-ups." Market reaction to China's latest inflation and population data was largely muted.

China's factory gate prices rose at the fastest rate in 3-1/2 years in April, official data showed on Tuesday.

But most analysts didn't think it would trigger a major policy shift by the central bank.

REUTERS