Asian Bloodbath Continues: Alibaba, XPeng Shed 2%, Yuan Hits Weakest Levels Since 2008

Hong Kong shares opened lower on Wednesday, with the benchmark Hang Seng slipping 2.5%, taking cues from the S&P 500 which fell deeper into the bear territory after hitting a near two-year low. The Chinese yuan hit its lowest level since 2008 and was trading at 7.2296 against the dollar on Wednesday.

EV-maker stocks sank in Hong Kong trading, with shares of Xpeng, Nio and Li Auto shares falling over 5%. Shares of JD.com plunged 5%, while Alibaba lost over 2%.

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Macro News: China’s industrial profits dropped 2.1% in the first eight months of 2022 compared to a year earlier, after a 1.1% drop logged in January-July, reported Reuters citing data from the National Bureau of Statistics (NBS).

Chinese monetary authorities have asked local banks to revive a yuan fixing tool that was abandoned two years ago as they look to defend the rapidly weakening currency, reported Reuters.

Company News: Tencent’s online literature arm stated it would pull the plug on its e-reader service, reported the South China Morning Post.

William Li, founder-CEO of Chinese EV maker Nio, has warned that Europe’s energy crisis is slowing its expansion in a region where it is aiming to take on dominant players, reported FT.

Top Gainers and Losers: Country Garden Services Holdings Company Limited and JD.com, Inc. are the top losers among Hang Seng constituents, having lost over 6% and 5% respectively. There were no gainers on Wednesday.

Global News: U.S. futures traded in the red on Wednesday morning Asia session. The Dow Jones futures were down 0.37% while the Nasdaq futures lost 0.6%. The S&P 500 futures were down 0.46%.

Elsewhere in Asia, Australia’s ASX 200 was down 0.7%. Japan’s Nikkei 225 was down 2.31% while China’s Shanghai Composite index lost 0.73%. South Korea’s Kospi was down 2.41%.