Here's Why Alibaba, Tencent Are Slumping For A Third Straight Day In Hong Kong Today

Shares of U.S.-listed Chinese tech companies Alibaba Group Holdings Ltd. BABA, JD.Com Inc. JD, Tencent Holdings TCEHY, and Baidu Inc. BIDU slumped for the third straight day in early trading in Hong Kong on Friday.

Macro Factors: Amid flat cues from global markets, the benchmark Hang Seng Index was also trading muted. The index has had a tough few weeks, having dropped to its lowest level since February this year. 

In U.S. markets, the Dow Jones ended 0.25% higher, and the Nasdaq Composite gained about 8 points on Thursday.

Company In News: With a stricter COVID-19 lockdown in China, analysts have been cautious toward Alibaba's stock. Benchmark analyst Fawne Jiang slashed the price target on Alibaba to $220 from $235 but maintained a 'buy' rating. Citigroup Inc. C also recently slashed Alibaba's price target following a COVID-19 resurgence in China.

Meanwhile, JD.com's billionaire founder Richard Liu has stepped down as the company's chief. Xu Lei, the president of JD.com, will take over as CEO and join the company's board of directors. 

The internet-based platform company Tencent said it would shut down its video game streaming platform Penguin Esports. It will terminate all services on June 7 after having already suspended new user registrations and in-app purchases.

Ahead of Baidu's Q1 earnings, US Tiger Securities has trimmed its target price to $245, down from $250 earlier. It expects first-quarter results to be largely in line but has lowered its second-quarter outlook due to surging COVID-19 cases in Shanghai and the soft macro outlook.

Price Action: According to data from Benzinga Pro, Baidu, Alibaba, and JD.com, shares ended over 3% lower in U.S .markets, and Tencent was down about 1%.