Alibaba And Tesla Rival Nio Slide For Third Day Straight In Hong Kong — What's Behind The Tech Rout?

Shares of U.S.-listed Chinese tech companies extended losses in Hong Kong for a third straight session on Tuesday, hurt by fears of global repercussions if China was seen as supporting Russia over its invasion of Ukraine.

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The Macro Factors: The benchmark Hang Seng Index fell 2.2% at press time, after posting a six-year closing low on Monday.

Worries that Chinese tech firms could be shunned if China supported Russia in the war against Ukraine stoked risk aversion. The U.S. has warned China against helping Russia in the war.

The COVID-19 outbreak in China also weighed on the market. China’s aviation regulator said international flights to Shanghai will be diverted to other Chinese cities from March 21 to May 1 due to a domestic surge in COVID-19 cases.

On the bright side, China’s retail sales, industrial production, and fixed asset investment grew at the start of the year and beat analysts' expectations.

Retail sales for the combined months of January and February grew by 6.7% year-on-year, while industrial production increased by 7.5% and fixed asset investment rose by 12.2% from the prior year, CNBC reported, citing data from the National Bureau of Statistics.

Companies In The News: JPMorgan has downgraded Alibaba, JD.Com, Baidu, Tencent, and several other Chinese tech companies to underweight and called them “uninvestable” over the next six to 12 months due to rising geopolitical and macro risks.

Cathie Wood-led Ark Investment Management raised its exposure in Chinese automaker BYD Company Limited BYDDY on Monday, buying 53,228 shares in the company estimated to be worth $2.3 million based on Monday’s closing price.

Shares of Chinese companies closed sharply lower in U.S. trading on Monday after the major averages ended mixed.

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