Global Market: Alibaba rout drags China, Hong Kong markets lower amid AI spending concerns

China and Hong Kong stocks fell sharply on Monday, led by technology shares, after Alibaba’s surprise $10.2 billion share placement renewed concerns over the heavy investment required to compete in artificial intelligence, Reuters reported.The benchmark Shanghai Composite Index declined 0.7% to 3,877.3 points, while the blue-chip CSI 300 Index dropped 1.3%.

Technology stocks bore the brunt of the selling, with the ChiNext Composite Index falling 3.5% and Shanghai’s tech-focused STAR50 Index sliding 3.26%.AI and semiconductor stocks also came under pressure.

The CSI AI Index dropped 4.7%, while the CSI Semiconductor Index lost more than 2%.

In Hong Kong, the Hang Seng Index fell 2.1%, and the Hang Seng Tech Index declined 3.8%, with the AI sector index tumbling more than 5%.Alibaba was among the biggest drags on the market.

The company’s shares plunged as much as 10.5% to a one-month low after it announced an HK$80 billion ($10.2 billion) share placement.