Chinese internet giants slide amid plans for more phone usage curbs
Shares of China’s biggest internet firms fell sharply on Wednesday after the country’s cyberspace watchdog issued new restrictions on mobile phone use by children, while traders also collected a measure of recent profits.
The Cyberspace Administration of China on Wednesday issued new regulations on mobile phone services for juveniles, and recommended that users within the ages of 8 to 15 should be limited to one hour of daily usage.
While the proposed rules have not yet been implemented, they indicate that Chinese authorities have not let up in their policing of the country’s biggest internet firms. The move also somewhat dented optimism over the country potentially winding down its regulatory crusade against its tech giants.
Heavyweight tech stocks in the country had rallied over the past two months on the prospect of easier regulation, and saw steep losses on Wednesday. Videogame giant Tencent Holdings Ltd (HK:0700), which stands to be particularly impacted by restrictions on mobile phone usage by children, fell 3.2% in Hong Kong trade.
Shares of Tencent peers Baidu Inc (HK:9888) (NASDAQ:BIDU) and Alibaba Group Holding Ltd (NYSE:BABA) sank 3.8% and 1.7%, respectively, while Meituan (HK:83690) and JD.com (HK:9618) (NASDAQ:JD) lost over 2% each.
China had earlier this year flagged a less strict stance against its internet giants, with policymakers promising more measures to boost private investment in the sector as Beijing struggles to support a slowing economic recovery.
But traders were now souring on the country’s plans to roll out more stimulus measures, with Chinese officials offering few details on how their proposed measures will be carried out.
Local tech stocks were also hit by some degree of profit taking, as investors fretted over rising U.S. interest rates ahead of key nonfarm payrolls data due on Friday. Expectations of an imminent pause in the Federal Reserve’s rate hike cycle had driven strong gains in global tech stocks.