Chinese technology stocks slumped as Xiaomi Corp’s share sale and a slew of negative headlines from major companies hurt sentiment.
The Hang Seng Tech Index dropped as much as 3.8% on Tuesday, taking its drop from a March 18 high to about 9%. Xiaomi shares were down more than 6% after raising $5.5 billion in an upsized placement.
Trading in Chinese shares have been choppy in recent sessions, as investors became more vigilant toward corporate developments following a world-beating rally. Alibaba Group Holding Ltd slid more than 3% after its chairman warned of a potential bubble forming in datacenter construction. Sunny Optical Technology Group shares plunged nearly 9% after warning of a market restructuring on a capacity glut.
“Xiaomi’s upsized share placement has weighed on market sentiment today with some investors worrying about such offering creating pressure on market liquidity,” said Steven Leung, an executive director at UOB Kay Hian Hong Kong Ltd. Xiaomi and a similar deal by BYD Co. earlier have together raised about $11 billion in March, he added.
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