Authorities in Beijing have released a new draft of proposed regulations, resulting in a decline in tech stocks. On Thursday, the stocks of Alibaba Group Holding Ltd, extending a selloff in Chinese technology giants, slumped to a record low, as much as 4.1%.
The selloff has pushed global fund managers to drop their Chinese stocks. Some of the most dynamic stakes attached to Alibaba shares went bearish. As per fund managers, investors are not at a point to cease amounts in any more additional policies. There is a lower expectation of growth, even if the worst in terms of new guidelines pass on for tech giants. Their growth rate would not be the same as what it was.
Chinese stock market crashing
Video streaming giant Kuaishou Technology slipped as much as 4.6%, and food-delivery giant Meituan 7.2%. Hong Kong’s Hang Seng Index plunged 2%.
On Tuesday, China released a new draft for regulations to prevent online firms from forcing exclusivity and blocking peers’ links and apps. The Chinese regulators stated that it is considering proposals to ensure the rights of drivers working for online service providers. China’s crackdown on the sector intensifies, and it has banned its online platforms to prevent market competition from unfair behaviors. The draft is the most trending in a series of moves affecting tech companies. Fueling shares also plunged. Those regulations are most likely to come into force this year. Due to these regulatory changes, the market value is to be declined by nearly US$1 trillion.
Chinese companies are facing continued pressure from the Securities and Exchange Commission. The commission has stated that the firms will require further declarations from Chinese companies before permitting them to sell stocks.
In Hong Kong, Alibaba’s stocks have fallen 29% this year and under 7% for the Hang Seng Index.