Alibaba And Other Major Stocks Trade Muted In Hong Kong Even As PBOC Cuts Benchmark Lending Rate For 1st Time In 2 Years

Shares of Alibaba Group Holding Limited (NYSE: BABA) and Baidu Inc. (NASDAQ: BIDU) traded slightly higher in Hong Kong on Monday, while JD.Com Inc. (NASDAQ: JD), Tencent Holdings Inc. (OTC: TCEHY), Li Auto Inc. (NASDAQ: LI) and Xpeng Inc. (NYSE: XPEV) slumped.

What’s Moving: Shares of Alibaba and Baidu traded about 1% higher each in Hong Kong at the time of writing, while JD.Com, Tencent, Li Auto and Xpeng traded lower, in a range between 1% and 3%.

Chinese EV startup Nio Inc. (NYSE: NIO) unveiled a mid-size sedan named ET5 at its annual Nio Day event on Saturday. The new vehicle is seen as a competitor to Tesla Inc.’s (NASDAQ: TSLA) Model 3 sedan, which is the Elon Musk-led company’s best-selling car globally.

See Also: How To Buy Alibaba (BABA) Stock

Hong Kong’s benchmark Hang Seng Index opened lower on Monday and was down almost 1% at the time of writing.

The index closed 1.2% lower on Friday amid worries about rising U.S.-China tensions after the U.S. government imposed new sanctions on Chinese tech companies.

Why Is It Moving? The Hang Seng Index extended losses even as the People’s Bank of China (PBOC) cut its benchmark lending rate for the first time in almost two years on Monday.

The one-year loan prime rate (LPR) was reduced from 3.85% to 3.8% as part of the central bank’s efforts to support the Chinese economy, which is struggling from muted consumer spending and a slump in the property sector.

Chinese property developers such as China Evergrande Group (OTC: EGRNY), Shimao Group Holdings and Kaisa Group Holdings dragged the Hong Kong market lower after a series of rating downgrades.

Worries about the spread of the Omicron coronavirus variant around the world also weighed on the market.

Meanwhile, Chinese artificial intelligence (AI) startup SenseTime Group has relaunched its $767 million initial public offering in Hong Kong on Monday and secured about $512 million from nine cornerstone investors, Bloomberg reported. The IPO was delayed by a week amid concerns over U.S. sanctions on the company.

Shares of Chinese companies closed mostly lower in U.S. trading on Friday after the major averages in the U.S. ended lower as investors grappled with the reality of tighter monetary policy by the Federal Reserve.

Alibaba’s shares closed 1.5% higher, while Nio’s shares ended lower by 0.2%.

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