COVID-19: Panic selling grips Chinese tech stocks again amid rising concerns over lockdown

The Hang Seng Tech Index slumped more than eight percent during morning trade, with the sector again at the forefront of losses in Hong Kong and China stocks, reports Bloomberg.

The Golden Dragon Index, which tracks American depository receipts (ADRs) of Chinese firms, plunged 10 percent on two consecutive days last week - something that has never happened before in its 22-year history, the media reported.

The tumble follows a spate of events that has spooked investors, reminding them of regulatory uncertainties from both China and the United States.

The US Securities and Exchange Commission last week named its first batch of Chinese stocks as part of a crackdown on foreign firms that refuse to open their books to US regulators, intensifying worries of delisting risks, Bloomberg reported.

China is facing yet another wave of COVID-19 pandemic outbreaking, forcing authorities to put 17.5 million residents of Shenzhen into lockdown for at least a week, media reports said on Monday.

Authorities also forbid people from leaving Jilin.

The country is witnessing a tough phase of the pandemic for the first time since COVID-19 outbreak was reported in Wuhan in 2020.

The Shenzhen lockdown, which came after new virus cases doubled nationwide to nearly 3,400, will be accompanied by three rounds of city-wide mass testing.

Called with little notice on Sunday, the order followed earlier restrictions placed on Shenzhen’s central business district, and will last until March 20, reports Bloomberg.

All bus and subway systems in the city were shut, and businesses, except those providing essential services, have been closed. Employees were told to work from home if they can, reports the media.

Residents of the city have been prevented from leaving it.

Meanwhile, Foxconn, one of Apple's biggest suppliers, has suspended operations in Shenzhen.

The world's second largest economy is still doggedly pursuing its zero-Covid strategy, even as other nations reopen and try to live with the virus.

The lockdowns in major Chinese cities will impact not just the country's post-pandemic recovery, but could deliver a new blow to global supply chains, reports CNN.

In its statement provided to CNN Business on Monday, Foxconn said that the "date of factory resumption is to be advised by the local government."