By Scott Murdoch and Julie Zhu

HONG KONG (Reuters) - Alibaba Group and Tencent shares rose in Hong Kong on Monday as China's $984 million fine for Ant Group was viewed as signalling the end of a regulatory crackdown on the country's technology sector.

After the penalty on Friday, Jack Ma-founded Alibaba affiliate Ant announced an up to $6 billion share buyback that values the fintech company at a 75% discount to that touted in an abandoned initial public offering (IPO) but was considered to provide liquidity and certainty for investors.

The abrupt cancellation of Ant's IPO in late 2020 heralded the start of a wide-ranging clampdown by Beijing on industries from technology to education, as regulators sought to contain what they saw as excesses and bad practice after years of runaway growth.

The People's Bank of China (PBOC) on Friday said that most of the prominent problems for platform companies' financial businesses had been rectified and regulators would shift their focus to overall regulation of the industry rather than specific companies.

"We view this announcement a key milestone for a regular, clear and visible regulatory environment for China's internet companies," Huatai Research analysts wrote in a note to clients.

The scrutiny of the last two years created an uncertain environment that wiped billions off China tech sector share prices, including online retail giant Alibaba, gaming company Tencent and food delivery group Meituan.

Alibaba's Hong Kong shares have shed 71% since early November 2020 when the Ant IPO was scrapped and the regulatory crackdown began.

Alibaba's Hong Kong-listed shares closed 3.2% up on Monday, beating a 0.6% rise for the benchmark Hang Seng index. Tencent closed 0.7% up.

In the US premarket trading, Alibaba's New York stock was down 0.1%.

Beijing's move to finalise penalties and outstanding issues with Ant and other tech names comes as China's economy "is challenged by a weak recovery" and is meant to assuage investor concerns as well as meeting commitments to support private sector growth, Daniel Tu, founder of Active Creation Capital, said.

Besides Ant, the Chinese authorities also fined Tencent's online payment platform Tenpay nearly 3 billion yuan ($414.88 million) over areas such as customer data management.

ANT GROUP'S SHRUNKEN VALUATION

Alibaba, which spun off Ant 12 years ago and has a 33% stake, on Sunday said it was considering whether to participate in the buyback that would transfer shares to an employee incentive scheme.