Shares of U.S.-listed Chinese firms traded significantly lower in Hong Kong on Thursday morning, with major tech names like Alibaba Group Holding BABA, JD.com Inc JD, Baidu Inc BIDU deep in the red, led by an 8% fall in Tencent Holdings TCEHY.
Electric vehicle makers NIO Inc NIO, Li Auto Inc LI, and Xpeng Inc XPEV were also under immense pressure.
Shares of these Chinese companies ended significantly lower in U.S. markets on Wednesday.
Global Markets Recap: At the time of writing, the benchmark Hang Seng Index was down nearly 3%, heading for its steepest one-day decline in two weeks.
Elsewhere, Australia's ASX 200 fell over 1.40%, Japan's Nikkei 225 was down 2.50%, while Shanghai's SSE Composite Index lost 0.52%.
Macro Factors: Weak cues from U.S. markets overnight, increasing worries over Beijing's policies to revive a coronavirus-battered economy and some discouraging corporate earnings dented investor sentiment.
Despite the Chinese vice premier's positive tone on the importance of domestic internet firms, tech stocks have largely been subdued this year amid ongoing regulatory clampdowns.
Company In News: Tencent on Wednesday reported its worst quarterly performance since it went public in 2004 due to COVID-19 lockdowns in China. The company said revenue remained stagnant, as quarterly profit plunged 51%. Tencent, which operates the Chinese super-app WeChat, is the fourth largest stock on Hang Seng.
Baidu's chip affiliate Kunlun is discussing raising 2 billion yuan ($317 million) in its second funding round.
Chinese policymakers have initiated discussions with domestic manufacturers regarding the extension of the EV subsidies program. That could provide some relief for companies like Li Auto, Xpeng and Nio, which have been hit by production disruptions and demand destruction due to a resurgence in COVID-19 infections.
Nio will debut with its secondary listing on the Singapore Stock Exchange on Friday. The stock listed in Singapore will be fully fungible with the ADSs on NYSE.
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