Tech Rout Goes Global, Sinks Hong Kong Shares In Wednesday Bloodbath

The robot carnage on Wall Street predictably spilled over into Asian markets on Wednesday. In addition to the multiple idiosyncratic stories (e.g. Facebook, Twitter, Nvidia, etc.) reports that the Trump administration is pondering a crackdown on Chinese investment in technology are not helping – at all.

Notably, the VXN/VIX ratio is now back to 1.3, rebounding from the dip lower in early February which was of course almost entirely attributable to the blow up of levered and inverse VIX products (i.e. the denominator spiking). So it looks like this is back on its way to the “new” average that we saw it 2017, when it reset higher following Goldman’s June 9 FAAMG call:

VXNVIX

Hong Kong shares tumbled as the Hang Seng and H-shares were off 2.5% amid a rout in tech shares:

HongKong

Wednesday was the worst day for both since February 9 (lot of “since February 8” and “since February 9” moments lately).

The usual suspects were under pressure as Tencent (Nomura cut their price target to HK$520 from HK$536), Sunny Optical and AAC all plunged:

Tech

Mainland shares weren’t hit nearly as hard and indeed the ChiNext managed to escape with just a 0.5% loss (not even worth showing the chart on that). The SHCOMP was lower by more than 1% and the CSI was under pressure, but again, the worst losses were in Hong Kong. Notably, BYD collapsed after tipping a horrendous decline in profits. Here are the Hong Kong listed shares:

BYD

On the bright side, Trump is super excited about Kim’s meeting with Xi and what the supposedly foretells for his own summit with the Hermit King.

But on Wednesday, “positive” geopolitical news wasn’t enough to mitigate the drag from the Nasdaq plunge.

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One thought on “Tech Rout Goes Global, Sinks Hong Kong Shares In Wednesday Bloodbath

  1. Pop, pop, pop one stitch at a time. The bond buying in the US yesterday was insane, back and forth goes the safety money, buy the dip, sell the dip what the fu*k do I do, oh my. The Fed is losing the short end of the curve and is out of control. A prop? or is safe $$$’s coming in? Dot com? Housing bubble? sure looks similar to me.

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