Alibaba Drops 2%, Nio Leads EV Crash With 7.5% Plunge: Is Snap Fallout Behind Hang Seng Bloodbath?

Hong Kong’s benchmark Hang Seng Index opened in the red on Monday following a weaker close on Wall Street on Friday, which was dominated by a plunge in social media stocks. The Hang Seng fell 0.6% in opening trade ahead of the crucial U.S. Federal Reserve meeting later this week that could potentially see a 75 bps rate hike.

EVs plunge: Nio Inc NIO led the losers, with the stock shedding more than 7% in opening trade. Tesla Inc TSLA rival XPeng Inc XPEV fell more than 4%, while Li Auto Inc LI was down nearly 4.6% at press time.

Tech Loses Shine: Shares of Alibaba Group Holding Ltd. BABA lost more than 2% in opening trade and Baidu Inc BIDU fell 1.43% on Monday morning. Tencent Holdings Ltd. TCEHY shares were down 1.2%, while shopping platform Meituan MPNGF lost 0.52%. 

E-commerce player JD.com Inc JD lost 1.3%.

Also read: Apple, Meta, Pfizer Among Key Companies Reporting In The Week Ahead, As Earnings Pick Up Pace

Company News: Nio is set to enter Germany, Holland, Denmark and Sweden with its flagship ET7 sedan along with its battery swap stations and domestic hiring, reports EV quoting the Deutsche Bank analyst Edison Yu.

China is planning to sort U.S.-listed Chinese firms into groups based on data sensitivity in order to prevent U.S. regulators from delisting them, reported the Financial Times. About 260 Chinese firms including Alibaba, Yum China Holdings Inc YUMC and Weibo Corp WB could get delisted from New York stock exchanges if they fail to meet requirements.

Macro News: Hong Kong banks are set to witness their first increase in prime lending rates in four years with the Fed’s imminent rate hike this Thursday to ward-off 40-year high inflation, the South China Morning Post reported, quoting analysts.

China has clarified that Xi Jinping has been administered a local Covid jab, in an effort to allay safety concerns, reported The Guardian. Zeng Yixin, deputy head of the National Health Commission, stated that domestically made shots have been used to vaccinate ‘State and Party leaders' — a category of top officials that would include President Xi Jinping and Premier Li Keqiang.

Global Markets: U.S. markets ended in the red on Friday, led by a plunge in social media stocks, with the Nasdaq index falling 1.87%. The Dow Jones Industrial Average closed 0.43% lower, while the S&P 500 shed 0.93%.

Shares of Snap Inc SNAP nosedived 39% over disappointing second-quarter results.

Elsewhere in Asia, Japan’s Nikkei 225 traded lower at 0.64% while the South Korean Kospi rose marginally by 0.03%. China’s Shanghai Composite traded flat, while Australia’s ASX 200 was up 0.07% in opening trade.