By Clarence Leong
Shares of Hong Kong-listed Chinese tech companies rebounded as the country's authorities moved to reassure international investors rattled by Beijing's sustained campaign to rein in big companies.
The Hang Seng TECH Index, which tracks 30 tech companies including Alibaba Group Holding Ltd. and Tencent Holdings Ltd., rose as much as 7.4% in Thursday morning trade and was 6.8% higher at 6879.50 by midday, bringing year-to-date losses to 18%. The city's benchmark Hang Seng Index was 2.7% higher at midday.
The Wall Street Journal reported that in a Wednesday evening meeting, China's top securities regulator privately told global financial institutions that Beijing will consider the impact on markets when it introduces new policies in the future. Bloomberg had earlier also reported on the meeting.
By midday, internet giant Tencent was up 8.4% at HK$484.60, on track for its biggest one-day percentage gain since January. Leading e-commerce company Alibaba gained 6.7% to HK$195.50, while food-delivery company Meituan was 8.7% higher at HK$226.80. The stocks are all still on track for weekly losses.
This week's selloff was sparked when regulators turned their focus to the country's lucrative after-school tutoring sector. Authorities had previously raised data security concerns that resulted in a crackdown on ride-hailing company Didi Global Inc. The quick succession of regulatory moves also included a six-month rectification program for internet companies and new rules requiring that food-delivery drivers be paid a minimum wage.
News of Wednesday's meeting "appears to have calmed the most frazzled of nerves," Mizuho Bank analyst Vishnu Varathan said in a note, but "this does not put wider Chinese regulatory risks to bed."
As Beijing seeks to tackle inequality, private housing, education, healthcare, tech and other sectors remain vulnerable to intervention, he said.
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(END) Dow Jones Newswires