TECH - Alibaba Tencent Price Cuts Put Chill On China Tech: Profit Squeeze Trade Tensions Push Stocks Near Correction Zone | Benzinga
Chinese technology stocks are facing a significant downturn, nearing a technical correction due to profit-taking and geopolitical uncertainties.
What Happened: The Hang Seng Tech Index, which tracks Chinese tech stocks listed in Hong Kong, fell by as much as 0.9% on Friday. This decline has pushed the index down more than 10% from its May 20 high, indicating a technical correction, according to Bloomberg.
Major contributors to the decline include Meituan. (OTC:MPNGF) and Lenovo Group (OTC:LNVGF) The sector had previously seen a rally in April, driven by optimism in earnings.
However, recent price cuts to AI services by Alibaba Group Holding (NYSE:BABA) and Tencent Holdings (OTC:TCEHY) have raised concerns about profitability. Additionally, ongoing trade tensions with the Group of Seven nations and profit-taking activities have further pressured ...