Shares of U.S.-listed Chinese companies were trading mostly lower in Hong Kong on Thursday morning, with tech stocks being a major drag.
Alibaba Group Holding BABA, JD.com Inc JD, Baidu Inc BIDU, and Tencent Holdings TCEHY traded deep in the red, as did EV makers Li Auto Inc LI and Xpeng Inc XPEV, although Nio Inc NIO bucked the trend.
Shares of these Chinese companies ended up mixed overnight on U.S. bourses.
Global Markets Recap: At press time, the benchmark Hang Seng Index was down nearly 2%, following weak global cues.
Australia's ASX 200, Shanghai's SSE Composite Index and Japan's Nikkei 225 were also down.
Macro Factors: Bloomberg reported that Hong Kong is reviving its toughest COVID-Zero measures as the virus seems to return with new omicron sub-variants. Hong Kong is forcing patients with even mild infections and their close contacts into centralized quarantine to tame any spread.
According to SCMP, top-tier investment bank China International Capital Corporation and Citic Securities have said that weaker consumer spending amid the fallout from city lockdowns will pose the biggest risk to the earnings of big tech companies this year.
Oil prices were lower during early Asia hours, with international benchmark Brent crude futures down 2.24% to $113.69 per barrel, after FT reported that Saudi Arabia is ready to pump more crude if Russian output declines.
Company In News: BofA Securities analyst Eddie Leung maintained a 'buy' rating for JD.com while keeping the price target unchanged at $76.
Tencent stopped guaranteeing a pay raise upon promotion amid a more comprehensive cost-cutting drive. This came after China's most valuable company's Q1 profit halved year-on-year, and revenues stagnated.
EV manufacturers Nio, XPeng, and Li Auto, appear to be bouncing back in May as China begins to allow restricted operations. For May, Nio's deliveries were up merely 4.7% from a year earlier, while XPeng and Li Auto reported 78% and 165.9% yearly increases, respectively.
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