Mainland China investors are only allowed to sell U.S. stocks: Nasdaq drops 10%, Hang Seng Index falls nearly 40%

Deep Tide TechFlow update. On July 29, a prior notice from May 22: the China Securities Regulatory Commission announced a serious crackdown on institutions such as Tiger Brokers, Futu, and Longbridge for illegal cross-border business operations, while eight departments simultaneously launched a remediation campaign for illegal cross-border securities business.

For mainland investors, U.S. stock trading permissions were switched to “only exit, not enter.” Existing users can only sell their holdings and transfer out funds.

At the time, the market had mocked this arrangement on social media as the “top-escaping signal” supposedly issued by the state.

Monitoring by Hyperinsight shows that in the hour when the announcement was released, XYZ100 on Hyperliquid traded between 29,479 points and 29,578 points. In the same day, the Nasdaq 100 Index and XYZ100’s prices were at the same level.

After that, Nasdaq 100 continued to edge higher. On June 3, it reached a peak of 30,762.20 points, breaking the all-time high. Then Tiger Brokers, Longbridge, and Futu all set June 12 as the execution node for business adjustments: for mainland existing users, only functions for selling, closing positions, and transferring out funds were retained, and mainland U.S. stock traders officially moved to a one-way exit.

In other words, once mainland investors were explicitly restricted from continuing to buy U.S. stocks, U.S. tech assets had already moved into the all-time high range. During this period, storage semiconductor stocks (semiconductor supply chain) also experienced a larger pullback.

As of the time of publication, XYZ100 is quoted at about 27,664 points, down about 10.1% from the historical high of 30,771 points. Compared with the time when the May 22 regulatory announcement was released, it is also down about 6.2%.

Additional data: the adjustment in the Korean market has been even more severe. The KOSPI fell from 7,847.71 points on May 22 to around 5,550 points currently, for a cumulative decline of nearly 29%. Compared with the record closing high set in June, the pullback has already approached 39%.