Tencent Holdings Ltd. slumped after a world-beating surge in the stock pushed its market value to the cusp of US$1 trillion ($1.33 trillion) for the first time.

The Chinese Internet behemoth lost as much as 5.5% in Hong Kong on Tuesday, putting its market capitalization below US$900 billion. Traders took profit after Monday’s 11% surge, which was Tencent’s biggest in almost a decade. Adding caution were comments by an advisor to China’s central bank to local media indicating that excessive liquidity and ultra-low borrowing costs were creating bubbles in the stock market.

The prospect that China will tighten funding conditions threatens to derail Tencent’s stock rally, which has been underpinned by a relentless flow of capital from the mainland. Onshore funds purchased a record amount of Hong Kong shares this month, with about a quarter of that targeting Tencent. As more than a billion people use its WeChat social-media platform, Tencent is ubiquitous to Chinese investors who have no access Hong Kong shares of rival Alibaba Group Holding Ltd. through the stock links.

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