Local and International Headlines

Chinese Tech Stocks Down on Interest Rate Fears and New Sanctions

0 32,850

Chinese tech stocks lost market value in the Hong Kong stock market on Wednesday. Investors became more cautious after comments from a Federal Reserve chief about US interest rate policy.

 

In addition, the United States and its allies are introducing new sanctions against Russia because of the war in Ukraine.

At a conference on Tuesday, Lael Brainard, a member of the board of governors of the US central bank umbrella, said that the central bank must take faster action to combat high inflation. For example, according to her, the balance sheet full of purchased bonds must be quickly reduced, and interest rates must be raised. The comments have already caused losses on the US tech exchange Nasdaq.

On the Hong Kong stock exchange, which was closed the day before due to a holiday, online store Alibaba, tech group Tencent and meal delivery company Meituan were worth up to 4 percent. The Hang Seng index in Hong Kong recorded an interim loss of 1.2 percent. The main index in Shanghai rose 0.1 percent. The Chinese government has indefinitely extended the lockdown in the port city of 26 million inhabitants as infections continue to rise.

Activity in the Chinese service sector contracted sharply in March. The world’s second-largest economy has been hit by China’s measures to contain the coronavirus outbreak. The level of service sector activity has fallen to its lowest level since early 2020, following the initial outbreak in Wuhan. As a result, tourism income has fallen sharply.

Stocks also fell elsewhere in Asia. The Nikkei in Japan closed the session down 1.6 percent at 27,350.30 points. The major Japanese tech investor Softbank lost 2.6 percent. The All Ordinaries lost 0.5 percent in Australia, and the Kospi in Seoul fell 0.8 percent.

Leave A Reply