A new onslaught of regulatory actions in China rattled investors Monday, hammering big tech stocks and fueling a fresh crash in the shares of companies that organize online and in-person tuition for Chinese schoolchildren.
The selloff knocked companies such as Tencent Holdings Ltd. , which dropped 7.7%. Hong Kong’s Hang Seng Tech index tumbled 6.6%, the worst performance for the benchmark since it launched almost exactly a year ago. And education stocks dived, with New Oriental Education & Technology Group Inc. crashing 47% in Hong Kong trading, building on a steep fall in the previous session.
Over the weekend, state media announced a severe curtailing of after-school tutoring was in the works, while regulators ordered Tencent to give up some exclusive music-licensing rights.
Then on Monday, authorities issued guidelines on how to treat food-delivery drivers, helping drive a 14% plunge in the stock of Meituan , one of a newer breed of Chinese tech platforms. Meanwhile, China’s main technology-sector regulator also ordered the country’s internet giants to fix certain anticompetitive practices and data security threats.
China already has undertaken a monthslong campaign to rein in big tech, spanning issues such as data security, monopolistic behavior and financial stability. The latest moves, covering both tutoring and technology, made clear that Beijing is willing to inflict substantial market pain to meet its social and regulatory goals.
