Hong Kong: Stocks tumble as traders extend tech rout

[HONG KONG] Hong Kong stocks plunged more than 6 per cent on Tuesday (Mar 15), extending the previous day's tech-fuelled rout that came after China locked down the tech hub of Shenzhen.

The Hang Seng Index shed 5.72 per cent, or 1,116.58 points, to 18,415.08.

The Shanghai Composite Index dived 4.95 per cent, or 159.57 points, to 3,063.97, while the Shenzhen Composite Index on China's second exchange lost 4.56 per cent, or 96.09 points, to 2,013.37.

Traders are also fretting over possible sanctions if Beijing responds to Russia's plea for military help in its Ukraine invasion, which could lead to penalties against Chinese firms.

China's foreign minister said Beijing did not want to be impacted by Western sanctions on Russia, state media reported on Tuesday.

Shares saw a minor bounce in late morning business thanks to bargain-buying and after data out of China suggested the world's No 2 economy fared better than expected at the start of the year.

But the selling resumed in the afternoon as traders offloaded risk assets.

The Hang Seng Index dived 5 per cent Monday and the Hang Seng Tech Index plunged 11 per cent after China said it would lock down Shenzhen to contain a Covid outbreak.

The tech index fell again Tuesday, shedding around 8 per cent, with market heavyweights Alibaba, JD.com and Tencent giving up a tenth of their value.

The crises have further rattled Hong Kong investors, who have had to contend with China's regulatory crackdown on the private sector, with once-flying technology companies often in the crosshairs.

Chinese firms listed in the United States were battered last week owing to concerns about a crackdown by authorities there.

A gauge of Chinese firms listed in New York plunged 11 per cent on Monday, with e-commerce giants Alibaba and JD.com down around 10 per cent.

A "material rerating for China tech may need to see a shift in regulatory tone", said Marvin Chen, a strategist at Bloomberg Intelligence, adding that interplay between Moscow and Beijing would be closely followed.

Meanwhile, Hong Kong's economy continues to face headwinds from containment measures put in place to fight a surge in Covid cases in the city, with an expected Federal Reserve interest rate hike this week not likely to help matters. AFP