Alibaba, Baidu, Chinese techs lose more ground in wake of new U.S. chip rules
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Chinese tech leaders like Alibaba (NYSE:BABA), Baidu (NASDAQ:BIDU) and Weibo (NASDAQ:WB) staggered for a second straight day as the sector lost more ground in the wake of new U.S. regulations regarding the sale of semiconductor technology to China.
Alibaba (BABA) shares fell 3.4%, while Baidu (BIDU) was off by more than 4%, JD.com (NASDAQ:JD) slipped by almost 2% and Tencent Holdings (OTCPK:TCEHY) fell by 2.6%.
The sector lost more ground following new rules that went into effect last Friday aimed at preventing U.S. semiconductor technology from getting into the hands of the Chinese military. Much of the chip technology covered by U.S. regulations is said to be concentrated in supercomputing.
While companies like Alibaba (BABA) might not be directly involved in the semiconductor market, many rely on U.S. chip technology to run and support their e-commerce, gaming and Internet search platforms. Such scale is a potential concern to U.S. officials because of Beijing's close monitoring of, and in many cases, ownership stakes in some of its larger tech companies.
Other Chinese tech stocks in the red included Weibo (WB), down by 5%; NetEase (NTES), which fell more than 3%; Bilibili (BILI), which gave up more than 6% and Pinduoduo (PDD), down by almost 3%.
The KraneShares CSI China Internet ETF (KWEB) retreated by 3% in afternoon trading.
Earlier Tuesday, chip-equipment company KLA Corp. (KLAC) said it would halt sales to China-based customers starting on Wednesday in order to comply with the new U.S. regulations.