Alibaba, Xpeng, Other Tech Stocks Tumble In Hong Kong As Tencent Cuts Stake In Sea

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

What’s Moving: Shares of the U.S.-listed Chinese companies traded lower in a range of 0.5% to above 8%.

See Also: How To Buy Alibaba (BABA) Stock

Hong Kong’s benchmark Hang Seng Index drifted lower after a positive start on Wednesday and was down 0.9% at the time of writing. The index ended little changed on Tuesday. 

Why Is It Moving? The Hang Seng Index fell after Tencent Holdings completed the sale of a 2.6% stake in Singapore-based gaming and e-commerce company Sea Limited (NYSE: SE) for $3 billion.

The move fanned speculation that the WeChat operator plans to cut its stake in other Chinese tech companies such as Meituan and Kuaishou Technology following China’s regulatory crackdown.

It also comes just two weeks after Tencent said it will distribute more than $16 billion of JD.Com stock as a special dividend to its shareholders.

Shares of state-owned distressed-debt manager China Huarong Asset Management Co. slumped more than 50% as trading resumed on Wednesday following a nine-month suspension. The company has completed a $6.6 billion recapitalization led by a state consortium that includes Citic Group.

Meanwhile, China’s central bank has rolled out a pilot version of a wallet app for the digital version of the yuan, China’s sovereign currency, it was reported, citing the South China Morning Post. The digital yuan, also known as e-CNY, is not a cryptocurrency like Bitcoin (CRYPTO: BTC).

Shares of Chinese companies closed notably lower in U.S. trading on Tuesday after the major averages in the U.S. ended mixed amid a spike in bond yields.

Alibaba’s shares closed 0.7% lower, while Nio’s shares ended lower by 5.7%.

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