China Stocks In U.S. Suffer Worst 2-Day Wipeout Since 2008
Beijing’s sweeping crackdowns of its technology and education sectors have unleashed shock waves across global markets, erasing $769 billion in value from US-listed Chinese stocks over the course of just five months, Matt Turner reported for Bloomberg News.
The Nasdaq Golden Dragon China Index -- which tracks 98 of China’s biggest firms listed in the US -- plunged 7% Monday after regulators in China unveiled an overhaul of its education sector which bans firms that teach school subjects from making profits, raising capital or going public.
This development adds more woes to investors, with Friday’s 8.5% drop bringing the gauge’s two-day decline to 15%, its biggest since 2008.
Chinese tech stocks listed in the US have been battered black and blue over the crackdown by Beijing on corporations like Tencent, which has been ordered to scrap its music streaming deals, as the company controls 80% of the market.
This has led market players to dump their stocks. Cathie Wood, head of Ark Investment Management, got rid of shares in tech behemoth Tencent Holdings and property site KE Holdings every day last week, data on the firm’s trading activity showed.