Chinese Tech Stocks Fall Sharply after Tencent Shut Down Game Streaming Site

Chinese tech stocks dipped for a third day after Tencent Holdings Ltd. came out with a decision to shut down its game streaming service further hurting sentiment in a sector which was already struggling weeks ago on regulatory risks concern.

In its official WeChat account the company announced its decision to shut down the platform citing due to “changes to its business development strategy”. It did not elaborate.
Beijing last year blocked the company’s attempt to create a $10 billion videogame streaming behemoth through the merger of the market’s top two players Huya  and DouYu on antitrust grounds. Huya said at the time it planned to merge Penguin Esports into the new entity.

“Shutting down Penguin Esports or any other service will weigh on cloud, data services demand by Tencent, affecting suppliers like GDS,” said Ivan Chow, president of Imperial Financial Group, as repeated by Bloomberg.

The Hang Send Tech Index fell as much as 2.6% cutting back some loss from earlier 3%.  Video streaming firm Bilibili Inc. and Tencent supplier GDS Holdings Ltd. were among the worst performers. Meituan also weighed on the gauge, following news that Sequoia Capital reduced stakes.

The Nasdaq Golden Dragon China Index closing 4.5% lower after shares of live-streaming platform lead a decline in the U.S.- listed stocks on Thursday.

The development added to the investor’s worry that although Chinese authorities vowing to add policy stimulus and stabilizing markets but with much little done to soothe concerns.

On Friday, China’s regulator said it will start a campaign until early December to curb violations in internet companies’ algorithm, warning that websites and platforms with big influence will be targeted.