Yesterday in Hong Kong, a massive sell-off of shares of Chinese technology companies was recorded. This happened against the backdrop of concerns about the possible assistance of the Chinese government to Russia in Ukraine. Sanctions against China, which are sure to follow, could cause big problems in the entire technological sphere of China.
The Hang Seng Tech Index fell over 8% during morning trading. The Golden Dragon Index, which tracks American Depository Receipts (ADRs) of Chinese firms, fell 10%. This has never happened in its entire 22-year history.
“At this stage, we still consider the technology space very vulnerable,” said Ms. Jun Li, chief investment officer of Power Pacific Investment Management. “At this stage it is very difficult to assess the risk profile.”
Both the Hang Seng Tech Index and the Nasdaq Golden Dragon Index lost over 60% of their highs, respectively. Shares in Alibaba Group Holding fell 8.4% on Monday in Hong Kong. In addition, shares of Tencent Holdings, headquartered in Shenzhen, fell more than 4%.
Historic declines in tech stocks are confusing investors, and Goldman Sachs analysts have moderated their optimism about Chinese stocks by lowering their estimates for the MSCI China index.
Source: ixbt
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