Are investors exiting bets on Chinese stocks?

Regulatory scrutiny in China pulled Asian shares lower especially tech and educational stocks. Resulting in Hong Kong’s Major Tech Index Hang Seng shedding 7.2% so far for this week.  

This comes along with a pattern to aim for social change and economic stability in China, With the first crackdown happening on crypto-currencies and then on the county’s main currency, the CNY and finally, the crackdown spread to equity markets, shortly after its anti-trust probe.  

The rectification program aimed to internet giants to adhere to anticompetitive practices and data security measures. The new regulatory measures forced big players to comply, involved barring specific companies from turning a profit or originating an IPO or funding on the stock market.  

Most sectors took a large hit of losses with Alibaba stock dropping more than 6%. While other tech stocks shed billions of dollars in market value. Tech giants like Tencent also dropped by 9%, to the point where they suspended all new user registrations till early August. Meanwhile, other Educational and Tech stocks tumbled 50% of their value.  

Ali Baba weekly chart showing a significant drop #BABA

Didi’s Application (Didi global Inc,) was amongst the biggest losers in the Chinese markets, after Chinese regulators banned the app from operating, facing an illegal collection of personal data accusations. This backlash came after they launched their company’s IPO in the U.S. 

In an intense wave of Chinese turmoil, Asian shares are found gasping for air but it’s also causing shares on wall street to drop as investors get rattled.  As for now, Beijing is going to remain a key theme for financial markets as it continues to fire shorts at tech giants.