Shares of Prudential plunged after reports that Chinese tax authorities had begun collecting personal income tax on returns from offshore insurance policies, stoking concerns over tighter regulatory oversight of cross-border investments. The development also weighed on other Hong Kong-focused financial stocks amid fears of weaker demand from mainland Chinese customers.

Chinese mainland authorities have levied a 20% personal income tax on Hong Kong policy dividends and prepaid premium interest in early cases

Prudential shares dropped over 10% after China tightened its tax net on Hong Kong insurance sales, hitting a business line worth 17% of group