The Hang Seng Index declined 0.7 per cent to 25,779.65 at 11.20am local time, adding to the 0.8 per cent loss a day earlier. The Hang Seng Tech Index slumped 1.5 per cent. On the mainland, the CSI 300 Index slid 0.1 per cent and the Shanghai Composite Index was little changed.

Technology firms were among the major losers. E-commerce giant Alibaba Group Holding slumped 1.7 per cent to HK$156.30 and peer JD.com slid 0.7 per cent to HK$122.50. WeChat operator Tencent Holdings lost 0.5 per cent to HK$626, while short-video platform Kuaishou Technology lost 2 per cent to HK$70. Electric-vehicle maker BYD slumped 2.4 per cent to HK$94.80, while smartphone and carmaker Xiaomi eased 1.3 per cent to HK$42.784.

The losses mirrored the retreat in the US overnight after Palantir Technologies, the US tech platform that helps integrate AI technologies, tumbled almost 8 per cent despite beating revenue estimates and raising its annual forecast. The decline tempered confidence in the durability of AI-led gains and reinforced concerns about the recent tech-led downturn.

“[Traders] didn’t sound panicked, but there was an unmistakable caution in their tone – a recognition that equity multiples had become stretched and that a 10 to 15 per cent correction wouldn’t just be tolerable, it might even be healthy,” said Stephen Innes, managing partner at SPI Asset Management.