Stocks of Alibaba and Tencent Plummeted After Latest Fines by Chinese Regulators

On Monday, shares of Chinese technology firms Alibaba and Tencent plunged sharply, a day after Chinese regulators imposed a fine on their subsidiaries for not revealing transactions and failing to comply with anti-monopoly rules.

In Hong Kong, shares of Ecommerce giant Alibaba in Hong Kong declined by 6.8%, while gaming and social media company Tencent Holdings plummeted by 3.2%. The Hang Seng index fell by 3%. A day before, China's State Administration for Market Regulation issued a list of 28 deals that violated anti-monopoly rules.
 

It included five of Alibaba's transactions and 12 of Tencent's. A wide-reaching crackdown on the technology sector has often hit stock prices in Hong Kong and Shanghai. For violations in each case, the maximum fine was 500,000 yuan ($74,500).

A wide-reaching crackdown on the technology sector has often hit stock prices in Hong Kong and Shanghai, though signs the authorities might be easing up spurred gains in recent months. Shares of Alibaba shares increased 70% and Tencent's were up by 18per cent since mid-March, before Monday's losses.

"The dip is likely to be temporary. The market was warier about the US raising interest rates so sharply, but it's just been overrun by the new fines," said Francis Lun, an investment manager and veteran market commentator in Hong Kong.