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China and Hong Kong stocks dragged down by technology shares

Hong Kong stocks

China’s blue-chip CSI300 index shed 0.8%, the Shanghai Composite Index declined 0.4%, the Hang Seng index lost 0.3%, and the Hong Kong China Enterprises Index shed 0.5%

China and Hong Kong stocks dropped on Tuesday morning, dragged down by technology shares, as Beijing’s new cybersecurity rules damp sentiment, despite a rebound in property plays.

China’s blue-chip CSI300 index shed 0.8% by the lunch break, while the Shanghai Composite Index declined 0.4%.

The Hang Seng index lost 0.3%, and the Hong Kong China Enterprises Index shed 0.5%.

China’s cyberspace regulator said it would implement new rules from Feb. 15 that require platform companies with data for more than 1 million users to undergo a security review before listing their shares overseas.

The Hang Seng Tech Index lost 1.4% at the end of the morning session, erasing early gains, as China’s continued clampdowns on the tech sector sour market mood.

Tech shares also dropped sharply in China. The Nasdaq-style STAR Market declined 2.2%, while the start-up market ChiNext shed 1.3%.

But property shares in China and Hong Kong bounced back sharply, as the sector witnesses elevated volatility on debt repayment worries.

The Hang Seng Mainland Properties Index rose 4.4% in morning trade, after a 2.8% decline on Monday.

China’s CSI300 Real Estate Index gained 2%.

Cash-strapped property developer China Evergrande Group said its contract sales dropped nearly 40% last year, and it will actively maintain communication with creditors. Its Hong Kong-listed shares, which were suspended on Monday, will resume trading on Tuesday afternoon.

Chinese telecommunication stocks, including China Telecom, China Unicom and China Mobile, rose, ahead of China Mobile’s Shanghai listing on Wednesday.

China Mobile sold 845.7 million shares at 57.58 yuan ($9.06) each in Shanghai, representing a 50% premium to its Hong Kong share price.

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