(Bloomberg) -- Chinese tech stocks trimmed gains as a Wall Street Journal report on fresh curbs facing the online video industry stoked concerns that Beijing’s regulatory crackdown is not yet over.
The Hang Seng Tech Index was up 0.3% as of the mid-day lunch break in Hong Kong, having earlier gained as much as 2.3%, following the report which said Beijing is preparing new regulations on the live-streaming industry including a daily cap on tipping -- a key revenue source for such firms. Key player Kuaishou Technology slid as much as 8.3%, reversing an earlier surge buoyed by the firm’s earnings beat.
The latest regulatory development sours sentiment as investors were expecting China to loosen its grips following Vice Premier Liu He’s mid-March pledge to stabilize capital markets and end crackdowns on private enterprise. The Hang Seng Tech Index has jumped more than 30% from its trough two weeks ago.
“This will create pressure for live streaming firms as they share a proportion from digital tips,” said Willer Chen, analyst at Forsyth Barr Asia Ltd. “If true, this will be a big regulation on live-streaming hosts. A great number of leading hosts earn way higher than the proposed 10,000 yuan daily cap.”
Sentiment has also been fragile following a number of earnings miss by technology companies, including Tencent Holdings (OTC:TCEHY) Ltd. and Alibaba (NYSE:BABA) Group Holding Ltd. The 30-day volatility for the Hang Seng tech gauge is at a record high as traders look for more clues on the sector’s earnings and regulatory outlook.
(Updates prices in second paragraph)
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