Tencent, JD.com weigh on Hong Kong market as China finalises cybersecurity measures to tighten oversight on tech companies
- Stocks erase earlier gains as China puts into effect cybersecurity measures from February 15 following the Didi Global debacle
- The CSI 300 Index is headed for another opening-day loss in new year, mirroring setbacks in 2019, 2016, 2014 and 2012
Hong Kong stocks fell as tech companies tumbled after Chinese regulatory authorities finalised cybersecurity review measures to tighten data oversight of technology companies.
The Hang Seng Index dropped 0.3 per cent to 23,206.26 at the local noon trading break, while the Tech Index slipped 1.4 per cent. The CSI300, which tracks the biggest stocks in Shenzhen and Shanghai, declined 0.8 per cent following a public holiday on Monday, mirroring opening-day setbacks in 2019, 2016, 2014 and 2012.
China will put into effect on February 15 measures specifying circumstances that affect or may affect national security by network platform operators’ data processing activities, according to a statement on Tuesday. It also published regulations to tame the power of algorithm.
“Sentiment remains cautious as the draconian policies on internet companies are not quite finished yet” on top of property-market concerns, said Louis Tse Ming-kwong, managing director at Wealthy Securities. “The first quarter is mainly a consolidation phase.”
The cybersecurity review measures, covering operators with personal information of at least 1 million users, followed a regulatory clampdown and China’s decision to haul up Didi Global days after its US$4.4 billion stock offering last June for potential breaches. The ride-hailing firm is now seeking to delist from New York.
The Hang Seng benchmark earlier gained on a private report that showed factory activity in mainland China grew at the fastest pace in six months in December. Robust sales of vehicles also underpinned a rally in auto stocks. BYD jumped 1.7 per cent after sales in December surged 76 per cent from a year earlier.
The Caixin China PMI Manufacturing Index rose to 50.9 in December from 49.9 for the previous month, the highest level since June. The report added to evidence that the Chinese economy gained sequential strength in the final quarter of 2021, according to Standard Chartered.
Major Asian markets were mixed on Tuesday. The Japanese and Australian benchmarks advanced by at least 1.7 per cent, while Korean stocks declined 0.2 per cent.
Author: Cheryl Heng, SCMP