Chinese technology companies’ shares fell in Hong Kong trade, hit by concerns about new regulations and overnight tech-stock losses in the U.S.

The Hang Seng Tech Index dropped as much as 4.2% and hit an all-time low of 5,350.06 early Wednesday before paring its losses. The index, which tracks the 30 largest technology companies listed in the city, was 3.5% lower at 5384.28 at the midday break.

The sector’s drop came after Beijing passed new rules that tighten controls on tech companies’ overseas listings and activities, while forbidding “unreasonable discrimination” in pricing based on user habit data, a key monetization tool for China’s largest e-commerce and short-video platforms.

Meituan 3690, -9.43% slumped 9.4% and Bilibili Inc. 9626, -8.84% declined 8.8%. Inc. 9618, -6.33% and Kuaishou Technology 1024, -6.23% both lost more than 6%. Tencent 700, -3.47% was 3.5% lower, coming after the company sold a US$3 billion stake in Singaporean internet company SEA Ltd. days after it sold shares in

Tencent’s latest disposal appears in line with Beijing’s drive to “clamp down [on] monopolistic practices in the technology/platform sector in China,” as well as concerns that sensitive data are controlled by a handful of private companies, said CMC Markets analyst Kelvin Wong. He said investors are now speculating that Tencent could cut its holdings in other Chinese tech companies such as Meituan and Kuaishou.

In the U.S., the Nasdaq Composite COMP, -1.33% fell 1.3% Tuesday after starting the new year higher. KGI Securities said higher Treasury yields and receding fear of omicron are driving a switch in funds from new-economy stocks to sectors tied to economic recovery.

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