Hong Kong shares for Alibaba Group Holding Ltd. tumbled as much as 5.8% on Friday, after a report that the company faces an inquiry in China in connection with a data theft case renewed regulatory concerns broadly.
In the US, the Nasdaq Golden Dragon China Index fell 2.2%,
bringing its weekly drop to 7.7%. The move was led by Alibaba’s US-traded
shares hitting their fifth consecutive day of decline. Technology peers Baidu
Inc. and JD.com Inc. slid 3% and 1%, respectively, while electric vehicle stock
Nio Inc. lost 0.2%.
Executives from Alibaba Group’s cloud division have been
summoned for talks by authorities in Shanghai in connection with the theft of a
vast police database, one of the nation’s largest cybersecurity breaches,
according to the Wall Street Journal.
The news, coupled with reports Monday that China hit tech
giants with regulatory fines, is denting investors sentiment on the group after
a rally in June.
In June, the Golden Dragon Index soared 16%, its best month
since 2019, with a string of analysts calling a bottom in the group, as the
government appeared to step back from regulatory crackdowns on the tech
industry and continued to roll out supportive measures. The rally then paused
amid jitters over regulatory uncertainty and fresh Covid-19 lockdown risks. The
Golden Dragon Index is still about 17% lower this year.
This week, the Hang Seng Tech Index entered a technical
correction, with analysts questioning if fresh probes on internet giants would
trigger another downturn in the sector.
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