Shares in Hong Kong suffered huge losses on Monday, as Chinese tech, as well as education stocks, dropped due to regulatory pressure. Hong Kong’s Hang Seng index dropped 4.13% to end its trading day at 26,192.32. At the same time, a summit between China and the U.S. got off to a virulent start, weighing on market sentiment.
Hong Kong-listed shares of Chinese tech company Tencent fell 7.72% and Alibaba also declined 6.38%. Shares of another company Meituan dropped 13.76%. The Hang Seng Tech index declined 6.57% to close at 6,790.96.
Those losses came after the country’s antitrust regulator ordered the tech giant Tencent to give up its exclusive music licensing rights. Tencent will also have to pay a fine for its anti-competitive behavior. The regulator’s decision shows that China continues to take measures against its domestic internet titans.
Shares of private education companies listed in the city also fell as regulators also stepped up restrictions on the sector. Koolearn Technology, New Oriental Education & Technology Group, as well as China Beststudy Education Group all saw their shares plunging more than 30% each.
The broader Asia-Pacific markets were largely lower, with mainland Chinese stocks also declining. The Shanghai composite fell 2.34% to 3,467.44 and the Shenzhen component dropped 2.646% to 14,630.85.
Tensions between the U.S. and China continue to dominate the headlines for a long time. It is not surprising that tensions between the major economies affect investor sentiment, and a high-level meeting created additional pressure on stocks. Chinese Vice Foreign Minister Xie Feng discussed problems during a meeting with U.S. Deputy Secretary of State Wendy Sherman.
Xie Feng noted that the two countries’ relationship is in a stalemate and faces serious difficulties. Tensions between the countries escalated in the last several years. The former U.S. President Donald Trump used tariffs and sanctions in an attempt to address various issues. He wanted to solve important problems such as unequal market access by imposing tariffs and sanctions.
Let’s have a look at other markets as well. South Korea’s Kospi dropped 0.91% to 3,224.95. In Australia, the S&P/ASX 200 finished its trading day flat at 7,394.30.
Returning to trade following holidays on Thursday and Friday, Japanese stocks defied the overall trend regionally. The Nikkei 225 gained 1.04% on the day to close at 27,833.29 and the Topix index added 1.11% to 1,925.62.
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