Tencent slumps to lead China tech sell-off as volatility climbs
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Hong Kong: Tencent Holdings Ltd led declines by technology shares in Hong Kong after Friday’s tumble by US peers sparked concern that recent gains were excessive.
Tencent and AAC Technologies Holdings Inc. were among the biggest losers on Hong Kong’s benchmark stock index, falling at least 2% as of 1:06 pm local time. The Hang Seng Index slid 1.3%, poised for its largest retreat in almost two months, as a gauge of expected volatility jumped the most since November. Great Wall Motor Co., the most shorted stock in Hong Kong, jumped 11%. The Shanghai Composite Index slipped 0.5%.
The S&P 500 technology index plunged 2.7% on Friday as companies from Apple Inc. to Nvidia Corp. tumbled. Hong Kong’s stock market has become increasingly reliant on Tencent, which surged 46% this year through Friday to add more than $100 billion in value to its shares. China’s largest Internet company accounted for a quarter of the Hang Seng Index’s gain in 2017.
“Investors have turned more cautious about the tech sector after increased short-selling activities and some stocks’ valuations looking a bit stretched following a rally,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. “The Nasdaq rout was a trigger for investors to take profit from the technology sector.”
The Hang Seng China Enterprises Index lost 1.1%, while the Shenzhen Composite Index fell 0.8% after its best week in a year. Bloomberg