BABA•BABA•HONG KONG, Aug 24 (Reuters) - China and Hong Kong shares weakened on Monday as a surprise share placement by tech major Alibaba rekindled concerns about AI spending.
The benchmark Shanghai Composite Index .SSEC slipped 0.7% to 3,877.3 points, while the blue-chip CSI 300 Index .CSI300 fell 1.3%.
Tech sectors led the decline, with the start-up board ChiNext Composite Index .CNT down 3.5% and Shanghai's tech-focused STAR50 Index .STAR50 down 3.26%.
Among other major losers, the CSI AI Index .CSI930713 fell 4.7% and the CSI Semiconductor Index .CSI931865 lost more than 2%.
Around the region, share markets were hesitant and oil prices eased as investors awaited details of threatened U.S. sanctions on Iran due later in the session.
The U.S. threatened Iran with what it called "the greatest financial offensive ever marshalled" as it prepared to roll out economic sanctions on Monday that target Iran's trade partners.
In Hong Kong, the Hang Seng Index .HSI lost 2.1%, and the Hang Seng Tech Index dropped 3.8%. The AI sector index tumbled more than 5%.
.HSTECH.HSAITShares of market heavyweight Alibaba 9988.HK sank as much as 10.5% to a one-month low after it announced a HK$80 billion ($10.2 billion) share placement at an 8.4% discount to its Friday close, in the city's largest-ever primary follow-on offering to fund its AI-related development.
"This placement is pretty surprising to the market, in terms of both its size and the discount," said Jason Chan, strategist at Bank of East Asia.
There will be some dilution pressure on the stock, and markets will again question how much returns the fierce AI competition can generate, he added.
