A drop in the share prices of Chinese tech stocks listed in Hong Kong dragged the city’s Hang Seng index to its lowest level this year as investors digested the fallout from a regulatory crackdown on ride-hailing business Didi Chuxing.

Food-ordering app Meituan fell 7 per cent while internet groups Alibaba and Tencent lost 4 per cent, helping push the Hang Seng index 3 per cent lower on Thursday. The index has lost almost 13 per cent since its peak in February.

The falls followed Chinese regulatory action against Didi. The ride-hailing group’s share price plunged 20 per cent on Tuesday after authorities prevented new users from signing up to its app just days after it raised more than $4bn in an initial public offering in New York. Regulators cited data security concerns for the move.

“This is just straightforward fallout from Didi,” said Andy Maynard, a trader at China Renaissance, adding that the losses extended across the market. “The trouble is, this is data, so you can apply this anywhere, not just tech,” he added. “It’s broadly red across every single sector”.

In mainland China, falls were less sharp, with the CSI 300 index of Shanghai- and Shenzhen-listed stocks dropping 1 per cent on Thursday.

China said this week that it would tighten rules for overseas listings, citing national security concerns over data, which could threaten the lucrative pipeline of share sales of the country’s firms on Wall Street. Such listings already amount to about $2tn of outstanding shares.

Companies from China raised a record $12.4bn from US listings in the first half of the year, generating hundred of millions of dollars in fees for investment banks, but the majority have sunk below their IPO price.

The events surrounding Didi came amid an increasingly fraught regulatory environment for tech businesses in China, which have faced recent antitrust warnings and penalties. In November last year, the planned IPO of Ant Group in Shanghai and Hong Kong, expected to be the largest in history, was unexpectedly cancelled.

Hong Kong Exchanges and Clearing, which owns the Hong Kong stock exchange, fell 1 per cent after gaining more than 7 per cent on Tuesday and Wednesday. Analysts said Chinese listings in the US would become more difficult in the future, potentially boosting the attractiveness of Hong Kong as a destination for fundraising.