Staff reporter and Bloomberg
Hong Kong stocks dropped to a nearly three-week low and tech shares tumbled amid Alibaba (9988) chief's warning of a data center glut and the lack of earnings surprises.
The benchmark Hang Seng Index closed at 23,344 points, down 561 points or 2.35 percent.
The main board's turnover reached HK$285.3 billion, boosted by inflows of HK$13.89 billion from mainland markets, up by 449 percent from a day earlier. The Hang Seng Tech Index dropped 3.8 percent, extending its slide from a March 18 high to nearly 10 percent.
Smartphone and electric carmaker Xiaomi (1810), which raised HK$42.6 billion in an upsized placement, closed 6.3 percent lower.
Alibaba fell 3.8 percent following its chairman's warning on a potential bubble forming in data center construction for artificial intelligence services. Kingsoft Cloud (3896) fell 6 percent and GDS (9698) slid 4.8 percent.
A world-beating rally in Chinese tech stocks is cooling from the initial shock-and-awe triggered by DeepSeek's AI model. While the nation's tech earnings mostly topped estimates or came in line in the just-concluded reporting season, such expectations were already baked in.
Earnings have been good so far, but they weren't enough to bring a "positive surprise," said Steven Leung, an executive director at UOB Kay Hian Hong Kong.
Another big decliner was Sunny Optical Technology (2382), which plunged 10 percent after the company cautioned against a capacity glut.
But even after the slide, the tech gauge remains up more than 23 percent for the year.
Elsewhere, shares of Hengan International (1044) dropped about 1.6 percent after the personal hygiene products manufacturer said its net profit declined 18 percent from a year prior.
The HSI tumbled 561 points yesterday. SING TAO
