China’s top tech stocks suffered a third day of heavy sales as the country tries to prevent its technology, real estate and private education companies from becoming too dominant.
China’s stock market posted outflows of $600 million on Tuesday, in part because of a $100 billion crackdown on private tutoring providers, which lost more than 45% of their shares. The country’s blue-chip index fell to its lowest level in nearly eight months, with the yuan at its lowest level since April.
China’s rise in global indexes in recent decades means money managers are more exposed than ever.
Other falls on Tuesday saw delivery platform Meituan drop 17 percent, e-commerce company Alibaba with a decline of almost 8% and internet giant Tencent with a decline of 9%.
William Russell, head of product specialist Equity at Allianz Global Investors, said the latest move from China had left investors blindsided.
Arnim Holzer, a strategist at EAB Investment Group, advised clients to hedge their portfolios against further China-related volatility in various ways, including options positions that ensure they benefit from volatility in emerging market bonds.
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