Chinese Stock Market Tumbles Due to New Regulations
The Chinese government’s industry-wide regulations are even affecting the South Korean stock market by causing stock prices to fall in China and Hong Kong. Related domestic ETFs and stocks are moving down in the wake.
KOSPI fell 0.91 percent to close at 3,224.95 points on July 26. Foreign and institutional investors sold 378.3 billion won and 336.9 billion won of stocks that day alone, respectively.
The fall was caused by the Chinese stock market, which showed the biggest drop in one year due to new regulations targeting big tech firms, platform service providers, education companies, biotech companies, etc. The SSE Composite Index fell 2.34 percent to close at 3,467.44, showing the first decline of more than 2 percent since July 24 last year. The Hang Seng Index and the Hang Seng China Enterprises Index dropped 3.88 percent and 4.51 percent, respectively.
The Chinese government is planning to impose a very heavy fine on Didi Chuxing and ban its business and investment in certain fields. In April this year, it levied a fine of US$2.8 billion on Alibaba with regard to market dominance abuse. More recently, it thwarted a merger between DouYu and Huya, which are game video streaming platforms.
On July 26, the Kodex China H Leverage ETF in the South Korean stock market plunged 9.15 percent. Likewise, TIGER China CSI 300 Leverage and KINDEX China CSI 300 Leverage dropped 6.87 percent and 6.11 percent, respectively.