Economy News Shares Technology

Chinese Tech Stocks Are at the Bottom – Investors Are Ready to Buy

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Chinese tech stocks soared on Monday. It was the best rally since January. Investors were eagerly waiting to buy low. Tech giant Kuaishou and Alibaba Health Information Technology led the Hang Seng Index, which rallied by 1.1%.

Meituan, a food distribution company, increased by 1.5%, wiping away its earlier losses. The company’s quarter two revenue was better than estimates.

The Chinese regulator crackdown on the technology sector seemed not to have disrupted the stock rally. School tutoring companies and the online gaming industry were also in the line of fire in Beijing to close the wealth gap. 

Investors are cautious about the regulations, which seems to have a negative impact. However, shares rebound occasionally in spite of these pessimistic news. 

Hong Kong stock selling continued for four trading sessions; the sold value of stocks was HK$4.2 billion or $536 million. The Hang Seng was 0.5% up by the close, and the CSI 300 declined by 0.3%.

In terms of losers, synthetic beauty and entertainment stocks continued to decline on Monday.  According to Citigroup analysts, China’s new regulatory guidelines are negatively impacting the economy in the short term. 

However, China aims to correct the cosmetic surgery industry’s illegal advertising.

The regulators pressed brokerages to intensify the oversight of their margin-financing businesses.

Orient Securities Co. Ltd. And GF Securities Co. Ltd declined to pass their daily limit of 10%. The CSI Financials also declined by 2.1%.

Chinese tech index rebounds

The Nasdaq Golden Dragon China Index jumped more than 9% during last week’s trade as bargain-hunting retail traders bought Chinese stocks. 

The Nasdaq Golden Drago Index tracks 98 of Chinese firms listed in the US. This rally broke an eight-week losing streak.

However, the performance was short lives as investors retraced due to a ban on US IPOs for tech firms. 

China has implemented new rules that will ban large tech firms from listing in the USA. These are companies with significant amounts of sensitive consumer data. This will hinder other tech companies from listing overseas.

However, whether it will impact those companies already listed in other markets still remains uncertain.

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Justin N. Richards

Justin N. Richards is a Florida-based technical analyst, market researcher, educator, and trader. Justin began his career in Chicago in 2001 performing futures market analysis for floor traders at the Chicago Board of Trade and the Chicago Mercantile Exchange. He also worked for numerous brokerage firms during that time, all of which hold him in high regard, and he has been providing outstanding analysis services for traders worldwide ever since. Mr. Richards is an expert in the area of market patterns, price and time analysis as it applies to futures, Forex, and stocks. In addition to these talents, he provides educational services for investors looking to improve their analysis and trade skills. Justin has a B.A. in Business Administration from UCLA and an M.S. in Financial Markets and Trading from the Illinois Institute of Technology. Justin’s professional experience, education, and discipline, not only make him an exceptional analyst, they point him out as a reliable, hard working and intelligent business strategist who is dedicated to his craft.
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