Alibaba Group Holding Ltd. led a drop in Chinese tech shares after the firm was reported to be facing an inquiry in connection with the theft of a vast police database.
The e-commerce giant’s stock slid 5.7%, taking its decline this week to more than 15%. The Hang Seng Tech Index fell 1.8% after the Nasdaq Golden Dragon China Index slid 2.2% on Thursday.
The latest report adds to the cautious sentiment toward the tech sector, after the antitrust watchdog levied fines on Alibaba and Tencent Holdings Ltd. over the weekend.
“The probe will give investors pause to assess if the reforms are over or still ongoing,” said Justin Tang, head of Asian research at United First Partners. “Given the fragile state of the markets, investors will adopt a sell first and ask questions later approach.”
Investors are souring on Chinese equities in recent days amid property sector risks and a resurgence of Covid cases. A slew of data due Friday, including figures on economic growth, industrial production and retail sales may help them gauge the impact of recent lockdowns on major cities.