Chinese companies, which are listed on Wall Street, continue their recent slump during today's session. The announcement of new regulations on the tutorial sector -- which has decimated private education firms -- along with more moves against tech firms and fresh rules for property and food delivery weighed on market sentiment. Now many market participants try to figure out where Chinese government will strike next.
Alibaba (BABA.US) shares fell by more than 6.0% and Tencent (TME.US) shares fell by almost 6.50% as many US investors expect a wider attack by Chinese regulators on domestic internet giants. Interestingly, several companies in the education technology sector are trading higher despite the pessimistic sentiment. Shares of TAL Education (TAL.US), New Oriental Education & Technology (EDU.US) and GSX Techedu (GOTU.US) increased from 2% to 5%. However, looking from a slightly wider perspective, the shares of these companies have lost more than half of their value since the first information appeared that the Chinese government wants to transform them into non-profit organizations.
Pinduoduo (PDD.US) is one of the worst performing stocks on Wall Street today. Company's stock extended recent losses and fell more than 10% on Tuesday. If the current sentiment prevails, support at $56.55 may be at risk. This level is strengthened by lower limit of the overbalance structure and 78.6 Fibonacci retracement of the entire upward wave which started back in June 2019. Source: xStation5
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