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(Bloomberg) – The rapid fall of Tencent Holdings Ltd. is expected to aggravate the decline in Hong Kong stocks this month, as the trade war intensifies in the technology sector.
Since the peak of last month, Tencent has lost 14% of its value, worth $ 66 billion. The dynamics of selling the title is the most intense since October. After being the largest contributor to gains on the Hong Kong Hang Seng Index earlier this year, it has since become the biggest drag.
The disappointing results of the first quarter resulted in very few demotions, analysts are now the least optimistic since 2016, while the release in China of a shooter inspired by Battle Royale was disappointing. As US tightens ties with Huawei Technologies Co., investors bail out Chinese technology companies – Alibaba Group Holding Ltd. has sunk in the last six months and Baidu Inc. has lost more than 8%.
The Hang Seng index closing below the 28,000 Monday support level, which has the effect of dispelling the confidence that prevails with respect to Tencent, making the gauge more vulnerable to further losses, as much as the rhetoric of the trade war becomes more vivid. The gauge fell 0.5% on Tuesday to close at its lowest level since January, with Tencent down for a fourth day.
To contact the reporter on this story: Richard Frost in Hong Kong at [email protected]
To contact the editor responsible for this story: Sarah Wells at [email protected]
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