Chinese tech stocks fell on weak corporate earnings and as global growth outlook intensified selling.
The Hang Seng Tech Index was down as much as 5.1% on Thursday, with Tencent Holdings Ltd. and Alibaba Group Holding Ltd. weighing the most.
Tencent tumbled more than 8% after the company reported its slowest revenue gain since going public in 2004. Xiaomi Corp. also fell ahead of its earnings release later in the day.
The selloff tracks disappointing earrings from US consumer shares that suggested an economic downturn maybe on its way.
Chinese Premier Li Keqiang repeated commitments to support the tech sector but it had marginal effect in boosting sentiment.
Tencent executives said it will take time for Beijing’s promises to translate into action.
“Tencent’s results suggest growth will be slower for longer, so the read through to the rest of China’s consumer facing technology companies is negative from a fundamental perspective,” said Vey-Sern Ling, a senior analyst with Union Bancaire Privée as reported by Bloomberg.
“However, there are reasons to be more optimistic in the second half given the increasing supportive signals from senior levels of the government.”
