China Tech Stock Boom Falters as Traders Shun Soaring Valuations
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A rally in Chinese technology companies is reversing at the fastest pace in at least a year on concern valuations are too high relative to earnings growth.
The CSI 300 Information Technology Index has plunged 19 percent from its June 2 record, almost twice the 12 percent loss by the broader gauge. Even after the declines, the hi-tech measure trades at 74 times earnings, versus 31 times for the Nasdaq Composite Index in the U.S. The Chinese gauge sank 6.3 percent by the close Thursday, while the Shanghai Composite Index declined 3.5 percent.