Xiaomi's Share Sale Sparks Market Concerns

China and Hong Kong's stock markets faced a downturn, driven by a selloff in tech stocks following Xiaomi's announcement of a share sale. This led to fears of overvaluation. While market indexes like China's CSI300 and Hong Kong's Hang Seng declined, experts suggest profit-taking and policy factors might also contribute.

On Tuesday, stock markets in China and Hong Kong experienced a decline, largely influenced by a tech stock selloff. The recent announcement of Xiaomi's intended share sale raised widespread concerns about market overvaluation.

By midday, China's CSI300 and Shanghai Composite indices both dropped approximately 0.2%. The technology sector was hit hardest, with the chip segment falling 1.1% and the AI industry decreasing by 1.8%.

Hong Kong's Hang Seng Index took a 2.2% tumble, while the Hang Seng Tech Index fell by 3.5%. Market experts speculated that Xiaomi's move could prompt similar actions from other companies, but some believed the downturn was also linked to profit-taking and reaction to recent government policy announcements.

(With inputs from agencies.)