Prudential, HSBC and Stan Chart tumble as China closes offshore tax loophole Proactive uses images sourced from ShutterstockPrudential PLC (LSE:PRU) shares plunged 11.6% to 967.9p after reports that Chinese authorities had begun taxing returns from offshore insurance policies, threatening demand from mainland customers. The sell-off spread to other Asia-focused FTSE 100 companies, with HSBC Holdings PLC (LSE:HSBA, NYSE:HSBC) and Standard Chartered PLC (LSE:STAN) both dropping over 6%. This could reduce the attraction of Hong Kong insurance products for wealthy mainland Chinese customers, who have traditionally used them for investment, savings and financial diversification. Prudential is particularly exposed because Hong Kong and mainland China are important sources of new insurance business for the group. Both banks generate a substantial proportion of their earnings in Hong Kong and other Asian markets, although the direct financial effect of the reported insurance tax remains unclear.