On Wednesday, Hong Kong-listed shares of Alibaba Group declined as hawkish comments from the Federal Reserve dampened sentiment toward richly-valued growth stocks.
The e-commerce giant edged down 4.05% or 0.59 points to $13.92 per share. This downturn slashed $12.36 billion from its market valuation.
Fed Governor Lael Brainard mentioned that the central bank would increase interest rates steadily.
At the same time, he stated that the bank would start balance sheet reduction as soon as next month.
Accordingly, Alibaba stocks tracked overnight losses in U.S. peers. This negative movement sent the Hang Seng Tech Index to a slump of 3.09%, or 0.15 points to the 4.58 mark.
The Nasdaq Golden Dragon index also shed 4.64% or 368.33 points to the 7,574.14 mark overnight.
In addition, the benchmark Nasdaq 100 plummeted 2.24% or 338.94 points to the 14,820.64 mark.
Wednesday’s losses came as sentiment toward Chinese tech stocks seemed to be improving.
This came after regulators sought to defuse U.S. delisting risks with a radical rule change proposal.
Meanwhile, investors are worried about Shanghai’s escalating coronavirus outbreak. The financial hub logged a record of 13,354 new Covid-19 infections on Tuesday.
This result boosted the national caseload to its highest since the first outbreak in early 2020. The world’s second-largest economy imposed harsh restriction measures hurting the growth outlook.
Analysts explained that risks remained for the broader Beijing economy, weighing on Alibaba stocks.
Economists rushed to cut their estimates as various curbs covered vast swathes of the nation.
Furthermore, China Caixin Services purchasing managers’ index plunged to 42.00 in March, lower than the previous 50.20.
This figure is the lowest in more than two years and falls deeper into contraction.
Alibaba, JD.com, Tencent slump
Like Alibaba, gaming giant Tencent Holdings Ltd. slashed 2.15% or 1.07 points to $48.68 per share.
Likewise, e-commerce firm JD.com slumped 4.79% or 1.51 points to $29.95 per share. The Hang Seng index dwindled by 1.32% or 296.77 points to the 22,205.54 mark.
Despite today’s setback, the benchmark has rebounded by almost 20.00% from its low in mid-March.
Most Asia-Pacific markets retreated, reflecting downbeat global stocks. In Japan, the Nikkei 225 index lost 1.55% or 431.48 points to the 27,356.50 mark.
Similarly, South Korea’s KOSPI slashed 0.82% or 22.56 points to the 2,736.64 mark.
MSCI’s broadest index of Asia-Pacific shares outside Japan lowered 1.10% or 6.60 points to the 594.47 mark.
