China and Hong Kong stock markets declined on Monday as a surprise share placement by Alibaba triggered concerns over rising AI spending and potential dilution. The Shanghai Composite Index fell 0.7%, while the CSI 300 dropped 1.3%, with technology stocks leading the broader market decline.
In Hong Kong, the Hang Seng Index fell 2.1% and the Hang Seng Tech Index declined 3.8%. Alibaba shares plunged as much as 10.5% to a one-month low after the technology giant announced an HK$80 billion ($10.2 billion) share placement at an 8.4% discount to its previous close. The offering, the largest primary follow-on share sale in Hong Kong, is aimed at funding Alibaba’s AI-related expansion.
The announcement raised concerns among investors about shareholder dilution and whether heavy investment in artificial intelligence will generate sufficient returns amid intensifying competition. Other technology and semiconductor stocks also came under pressure, while regional markets remained cautious ahead of potential US sanctions targeting Iran.
