Chinese and Hong Kong equities declined on Monday after Alibaba launched an $10.2 billion share placement at an 8.4% discount, the largest primary follow-on offering in Hong Kong.
The deal, intended to fund artificial intelligence initiatives, triggered a 10.5% slump in Alibaba’s shares to a one-month low. Regional markets extended losses as the announcement rippled across Asian benchmarks. The Shanghai Composite Index fell 0.59% to 3,882 points, its lowest close in three weeks, while the CSI300 Index dropped 1.21% to 4,563 points.
Technology-focused gauges bore the brunt of the decline. The ChiNext Composite Index shed 3.2%, and the CSI AI Index plunged 4.4%, with the sector’s gauge described as falling more than 5%. The Shanghai STAR50 Index, which tracks top domestic firms, declined 3.1%, while the CSI Semiconductor Index slipped 1.7%.
In Hong Kong, the Hang Seng Index retreated 1.89% to 25,517 points, and the Hang Seng Tech Index dropped 3.6%. Regional peers also weakened: Tokyo’s Nikkei fell 0.74% to 65,528 points, Seoul’s KOSPI slid 3.12% to 6,696 points, and Taipei’s TAIEX declined 1.02% to 44,762 points. Singapore’s Straits Times Index eased 0.15% to 5,680 points, while Sydney’s S&P/ASX 200 bucked the trend with a 0.49% gain to 9,103 points.
Jason Chan, strategist at the Bank of East Asia, noted the placement’s scale and discount were unexpected, adding to market uncertainty. The deal’s timing and pricing weighed on investor sentiment amid broader concerns over liquidity and valuation in China’s tech sector.
