Alibaba, Baidu Slide Over 3% As Wall Street Horror Spreads To Hong Kong Stocks: Report Sparks Fears Of US-China Tensions Over Taiwan

Hong Kong shares plunged on Wednesday, taking cues from a heavy sell-off on Wall Street triggered by higher-than-expected U.S. inflation for August. Shares of Alibaba, Baidu, and JD.com fell over 3%, with the benchmark Hang Seng Index losing over 2.3%. A report of the United States considering sanctions against China to ward off any potential attack on Taiwan further soured market sentiment.

Despite the sell-off, shares of EV makers Nio and Li Auto held up with gains of over 1%.

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Macro News: Chinese Premier Li Keqiang has called for more policies to boost consumption in the economy as the latest data indicate a further slump in travel and spending over a three-day public holiday amid COVID-19 controls, reported Bloomberg.

The United States is looking at options for a sanctions package against China to prevent it from invading Taiwan, with the European Union coming under diplomatic pressure from Taipei to do the same, Reuters reported, citing sources.

Company News: Starbucks Corporation SBUX has said it is planning to have about 9,000 stores in China by 2025, which is a 56% rise from the present count, reported Reuters.

Tencent Holdings received approval for a new game for the first time since Chinese authorities froze all licensing in 2021, according to media reports.

Top Gainers and Losers: Techtronic Industries Company Limited and WuXi Biologics (Cayman) Inc. are the top losers among Hang Seng's top 30 constituents, shedding over 6% and 4%, respectively. CNOOC Limited is the only gainer, up 0.6% on Wednesday morning.

Global News: U.S. futures traded mixed on Tuesday morning Asia session. The Dow Jones futures were up 0.08%, while Nasdaq futures lost 0.07%. The S&P 500 futures rose 0.04%.

Elsewhere in Asia, Australia’s ASX 200 plunged 2.76%. Japan’s Nikkei 225 was down 2.29% while China’s Shanghai Composite index fell 0.74%. South Korea’s Kospi, too, was down 1.62%.