Hong Kong: Market fall into bear territory

Hong Kong stock market finished session steep down on Friday, 20 August 2021, with the Hang Seng index declining more than 20% lower from its mid-February high, as risk aversion selloff continued amid concerns that the fast-spreading Delta variant of COVID-19 could delay an economic recovery, with China's continuing regulatory crackdown on the sector intensified selloff in the market.

At closing bell, the benchmark Hang Seng Index fell 1.84%, or 466.61 points, to 24,849.72. The Hang Seng China Enterprises Index dropped 1.95%, or 173.58 points, to 8,742.44. The Hang Seng Index dropped 5.8% for the week.

The once high-flying Chinese technology firms have been hit hard as investors flee Beijing's regulatory crackdown. Traders were uncertain about how far Beijing's crackdown will go, which has propelled analysts to downgrade the prices of stocks in anticipation of more regulatory action.

Going beyond the initial antitrust policy tightening against technology giants, the government has swiftly moved to reduce the burden of schoolchildren and parents by cracking down on the education technology segment. It has also moved to protect the rights of workers such as those in the food delivery sector. On Friday, health care technology firms joined the downward trend after People's Daily said that the methods of diagnoses, prescriptions and use of medicine on health care technology platforms needed to be improved to ensure safety.

Shares of technology companies declined, as the impact of China's regulatory tightening continued to hurt investor confidence. Meituan fell 4.5% and Alibaba Group Holding retreated 2.6%. Tencent Holdings rose 1% after fluctuated between gains and losses during the day.

Shares of pharmaceutical companies were also lower. CSPC Pharmaceutical Group fell 7% and Wuxi Biologics lost 7.5%.

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