Tesla Production Reports Lead To Carnage For Chinese EV Stocks As Hang Seng Tech Majors Hold It Together

Hong Kong stocks opened mixed although the benchmark Hang Seng rose over 2% in morning trade as China has removed some of its COVID restrictions earlier than anticipated. Shares of Alibaba, Meituan and Tencent gained over 2% in morning trade.

However, EV stocks declined Nio falling over 9% and Xpeng shedding over 7% in morning trade as demand concerns gained momentum following reports about Tesla Inc (NASDAQ: TSLA) trimming of production schedule and Nio’s lowering of guidance. Li Auto shares too fell over 6%.

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Macro News: Profits at industrial firms in China fell in the first 11 months of the year, as production slowed and factory-gate prices declined in the wake of Covid disruptions, reported Bloomberg. Earnings dropped 3.6% in the first 11 months of 2022, the report said.

China is set to publish data on COVID-19 cases once a month when the disease comes under Category B management, reported Reuters citing an official at the Chinese Center for Disease Control and Prevention.

Company News: Tesla Inc reportedly plans to run a reduced production schedule at its Shanghai Giga plant in January.

Nio has lowered its fourth-quarter deliveries guidance from 43,000-48,000 units to 38,500-39,500 units.

Top Gainers and Losers: WuXi Biologics (Cayman) Inc. and ENN Energy Holdings Limited were the top gainers among Hang Seng constituents, having risen over 5% each. Alibaba Health Information Technology Limited and Country Garden Services Holdings Company Limited are the only two losers, having shed 3.1% and 0.62%.

Global News: U.S. futures traded in the green on Wednesday morning Asia session. The Dow Jones futures gained 0.1% while the Nasdaq futures rose 0.17%. The S&P 500 futures were trading higher by 0.13%.

Elsewhere in Asia Pacific, Australia’s ASX 200 was trading lower by 0.2%. Japan’s Nikkei 225 traded 0.58% lower while China’s Shanghai Composite index fell 0.1%. South Korea’s Kospi lost 2.04%.

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