Tech-Driven Selloff Hits Hong Kong Stocks Amid Valuation Concerns

Hong Kong stocks fell sharply on Tuesday, with tech stocks leading the decline. Xiaomi's upcoming $5.27 billion share sale raised concerns about inflated valuations in the market. The Hang Seng Index dropped 2.4%, while the Hang Seng Tech Index fell 3.8%. Investors remain wary of high valuations and potential profit-taking.

Hong Kong stocks took a significant hit on Tuesday, largely driven by a downturn in tech stocks. The Hang Seng Index dropped by 2.4%, its lowest point in nearly two weeks, as Xiaomi's impending share sale sparked fears over market valuation levels.

The tech-centric Hang Seng Tech Index experienced a notable decline of 3.8%, marking its lowest point since March 4. Onshore markets remained relatively stable, with the CSI300 index inching down less than 0.1% and the Shanghai Composite index showing minimal change.

Xiaomi's shares plummeted 6.3%, their steepest fall since October, following the announcement of a $5.27 billion share sale. Other tech firms like Xpeng and Li Auto also saw significant declines. Analysts caution that while Xiaomi's move may concern investors about other companies' valuations, profit-taking at the end of the quarter remains a likely factor.

(With inputs from agencies.)