China’s most-watched stock benchmark plunged into bear after a sell-off of some of the country’s largest tech companies.

The MSCI China Index lost 3% on Thursday, extending losses from its mid-February high to over 20%. This is the second time the meter has fallen into a bear market in just over a year. Last March, key equity benchmarks collapsed after the spread of the Covid-19 pandemic.

Meituan shares fall for 10th session of the consumer criticism group

Equity benchmarks in Hong Kong and the mainland are among the world’s worst performers since February as Beijing cracks down on heavy tech companies for monopoly practices, further dampening investor sentiment, already weighed down by concerns about liquidity shortages in China.

“I wouldn’t be surprised if we saw a sustained 10% correction in the MSCI China for the next quarter or so,” John Woods, chief investment officer Asia Pacific for Credit Suisse Group AG, told Bloomberg TV on May 12, which intensified regulatory interventions are mentioned as the main concern. “That puts a strain on the extremely important tech sector.”

Tencent Holdings Ltd., Alibaba Group Holding Ltd. and Meituan were responsible for more than 40% of the index’s decline since the February high. Bloomberg data Show. Alibaba plunged to its lowest level in nearly a year in New York after reporting its first quarterly loss since 2012 on Thursday. Investors were disappointed with the results and feared that the spending outlook could put pressure on margins.

Read: Alibaba Hits Its Lowest Since June On Spending Plans: Street Wrap

A Hong Kong meter tracking Chinese technology stocks has lost more than 30% since a February high. Beijing had promised to curb the “ruthless” advance of technology companies into the financial world and to take action against online monopolies. It has forced Jack Ma’s Ant Group Co. to remodel its businesses and fined giants like Tencent and Meituan for violations Antitrust law Regulations. This week, Meituan collapsed after its CEO posted a poem believed to be critical of Beijing.

– With the support of Divya Balji

(Updated details in the fifth and sixth paragraphs.)

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