By Ishika Mookerjee August 20, 2021, 4:17 PM GMT+8
- Hang Seng Index has declined 5.8% this week, Alibaba falls
- Platform operators and drug sales in regulatory firing line
Hong Kong’s benchmark stock index entered a technical bear market, amid a deepening rout triggered by investor concerns over China’s regulatory crackdown across a swathe of industries.
The Hang Seng Index fell 1.8% on Friday, taking losses from its recent Feb. 17 peak to more than 20%. That extended its weekly loss to 5.8%, the worst showing since March 2020, with Alibaba Group Holding Ltd. and Meituan weighting on the gauge Friday.
Investors are still finding it hard to assign a fair value to affected companies as Chinese authorities and state media target a slew of sectors in a campaign that has upended industries from education and online commerce to car-sharing.
On Friday, legislation setting out tougher rules on use of customer data and local media commentary on online drug sales sparked double-digit declines in stocks such as Ping An Healthcare and Technology Co. and Alibaba Health Information Technology Ltd. The Hang Seng Tech Index slumped to a fresh record low.
The biggest pull on the Hang Seng Index this week, internet bellwether Alibaba’s shares hit a record low in Hong Kong this week as Tencent Holdings Ltd. warned the industry to prepare for more regulations including substantial changes to how companies use data for advertising.
As the selling intensifies, China’s internet firms are disappearing from the list of the world’s 10 largest companies by market value. The Hang Seng Index is now down nearly 9% this year, one of the worst performers in Asia.