Mainland and Hong Kong shares weakened on Monday as a surprise share placement by tech major Alibaba rekindled concerns about AI spending and weighed on the tech sector.

In Hong Kong, the benchmark Hang Seng Index dropped 492 points, or 1.9 percent, to 25,517 on turnover of HK$291.15 billion.

The tech index dropped 172 points, or 3.6 percent, to 4,594 while the China enterprises index fell 162 points, or 1.9 percent, to 8,471.

Shares of market heavyweight Alibaba sank up to 10.5 percent to a one-month low after it announced a HK$80 billion share placement at an 8.4 percent discount ⁠to its Friday close, in the city's largest-ever primary follow-on offering to fund its AI-related development.

"This placement is pretty surprising to the market, in terms of both its size and the discount," said Jason Chan, strategist at Bank of East Asia.

There will be some dilution pressure on the stock, and markets will again question the amount of returns that the fierce AI competition can generate, he added.

Up north, the Shanghai Composite Index fell 23 points, or 0.59 percent, to 3,882 on turnover of 952.04 billion yuan.

The Shenzhen Component Index slid 299 points, or 2.13 percent, to close at 13,794 on turnover of 1.06 trillion yuan while the ChiNext Index plunged 113 points, or 3.21 percent, to 3,431 on turnover of 505.83 billion yuan.

Tech sectors led the decline, with the start-up board ChiNext Composite Index down 3.2 percent and Shanghai's tech-focused STAR50 Index down 3.1 percent.

Among other major losers, the CSI ⁠AI Index fell 4.4 percent and the CSI Semiconductor Index ⁠lost 1.7 percent.

Around the region, share markets were hesitant and oil prices eased as investors awaited details of threatened US sanctions on Iran.

The US threatened Iran with what it called "the greatest financial offensive ever marshalled" as it prepared to roll ⁠out economic sanctions on Monday that target Iran's trade partners.

In Tokyo, the Nikkei ended 488 points, or 0.7 percent, down at 65,528.09 as most AI-related shares, which tend to be heavily weighted on the 225-strong index, declined, with Fujikura losing five percent, Advantest dropping 3.9 percent ⁠and SoftBank Group slipping 5.3 percent.

The broader Topix inched up six points, or 0.15 percent, to 4,013.

In Seoul, the Kospi slumped almost 216 points, or 3.12 percent to 6,696 amid investor disappointment over index heavyweight Samsung Electronics' announcement of lower-than-expected shareholder returns. (Reuters/Xinhua)



Edited by Tony Sabine