Tech stocks tumble as Fed hikes worry investors

Concerns about the Federal Reserve's aggressive rate hikes coupled with regulatory risks shook the sector's outlook, as it fell to a fresh low on Thursday.

The Hang Seng Tech Index dropped by 2.5% in Hong Kong before paring losses, touching the lowest since the gauge's inception in 2020. The gauge fell below its March low before authorities pledged broad support. The benchmark Hang Seng Index fell by as much as 1.2%, trading at the lowest since October 2011.

The risk off sentiment has deepened for Chinese growth shares after the Federal Reserve hiked interest rates by 75 basis points and signaled further pain ahead. The pound's weakness hurt sentiment as investors worry that the UK's dramatic tax cuts may fuel global inflation.

The economy is slowing down due to the Pandemic-linked lock-downs and rising geopolitical tensions. Many technology firms listing status in the US are uncertain, as US inspectors and Chinese regulators converged to talk about the audit work paper of the companies.

Market sentiment is on a turbulent ride, due to the fluctuation of major currencies and governments intervention, said Banny Lam, head of research at CEB International Investment Corp, adding that a weaker yuan is also hurting high-value tech stocks.

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