China’s technology shares have recovered as investor concerns about gaming have subsided

As investor fears about gambling have subsided, China’s technology equities have recovered.

After a newspaper report confirmed that Beijing was slowing rather than prohibiting new game approvals, Chinese technology stocks rebounded, snapping a two-day losing streak.

The Hang Seng Tech Index rose 2.9 percent on Friday, marking the index’s third week of gains. Tencent Holdings Ltd. and NetEase Inc. were both up at least 2.1 percent after falling the day before. The Hong Kong Hang Seng Index climbed 1.9 percent as well.

Following the clarification of a Thursday story by the South China Morning Post that the government had temporarily halted the approval of new online games, the return to buying matched fading market anxieties over the broader IT sector. It was clarified that the activity is slowing rather than coming to a complete halt.

According to Linus Yip, chief strategist at First Shanghai Securities, the drop in Tencent and its equivalents on Thursday may have been overblown, despite customers’ emotional readiness for future crackdowns. Other non-gaming equities, like as Meituan, he claims, have been “miscalculated.” The stock of the delivery company surged 4.3 percent, reclaiming much of the ground lost on Thursday.

Following an epic drop earlier this quarter, fueled by Beijing’s decision to restrict profit-making after-school tutoring services, bargain hunters have been looking for opportunities in battered Chinese IT equities. However, in the face of ongoing limits, mood remains unstable.

JD and Alibaba are among the best performing

The Hang Seng Tech Index is up approximately 14 percent from its bottom on August 20, but it is still down nearly 38 percent from its top in February.

JD.com and Alibaba, two Chinese IT stocks, are among the best-performing. On Tuesday, the stock prices of Hong Kong-listed companies Tencent, Alibaba, and JD.com all rose.

A tightening regulatory environment in China’s technology sector has taken its toll on these firms.

Analysts predicted that new legislation would slow after China passed a critical data privacy law on Friday, but that internet companies would continue to thrive.

On Tuesday, investors repurchased some of the names that had taken a beating in recent months, resulting in a significant increase in Chinese tech stocks.

A flurry of positive earnings announcements from Chinese technology behemoths fueled the euphoria.

JD.com and Alibaba’s U.S.-listed equities rose 8.2 and 4.9 percent, respectively, during premarket trade. As a result, Baidu’s stock price increased by 3.9%.

On Tuesday, Chinese technology stocks performed well in Hong Kong as well. Overall, the Hang Seng Composite Index increased by 2.5 percent, while the Hang Seng Tech Index increased by 7.5 percent. Tencent’s Hong Kong-listed stock was up 8.8 percent, while Alibaba’s stock was up 9.5 percent.


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