The Hang Seng Index fell 0.9 per cent to 17,351.41 at 3.00pm local time, erasing all of this week’s advance. The Tech Index tumbled 2 per cent, while the Shanghai Composite Index dropped 0.4 per cent.
JD.com tumbled 8.6 per cent to HK$102.60, erasing HK$28 billion (US$3.5 billion) from the company’s market capitalisation in Hong Kong. US retailer Walmart Inc raised US$3.6 billion from the sale of its stake in US-listed shares of the Chinese firm, Bloomberg reported. It sold 144.5 million shares at US$24.95 each, an 11 per cent discount to the market price, to end a relationship cemented since 2016.
JD.com has been a “valued partner”, Reuters reported, citing a Walmart statement. The impending sale will allow the US retailer to focus on its own China operations and deploy capital towards other priorities, the report said.
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Why investors can expect more market volatility after recent global stock sell-off
Why investors can expect more market volatility after recent global stock sell-off
Other Chinese tech stocks slumped in tandem on the news. Short-video platform owner Kuaishou Technology crashed 10.8 per cent to HK$39.60, Alibaba Group Holding slipped 1.2 per cent to HK$79.45 and smartphone maker Xiaomi retreated 1.6 per cent to HK$17.40.
“The news affected the overall sentiment on tech stocks,” said Dickie Wong, executive director at Kingston Securities. “Investors, including the well-performing fund managers, are turning conservative” because many Hong Kong-listed tech companies also have big foreign shareholders, he added.
Instead, investors are looking for undervalued stocks and those supported buy-back programmes, Wong said. Stock buy-backs in Hong Kong this year has reached an all-time high of HK$164.8 billion (US$21.2 billion), and surpassed last year’s total by 30 per cent, according to benchmark compiler Hang Seng Indexes Company.
Bourse operator Hong Kong Exchanges and Clearing dropped 2.1 per cent to HK$227.2 after its first-half profit fell 3 per cent largely due to decline in the first-quarter net income.
Limiting losses, Sunny Optical Technology rose 7.4 per cent to HK$48.80 after its quarterly earnings beat estimates.
Tencent, the world’s largest video games company, rose 0.2 per cent after its new game: Black Myth: Wukong broke the record to become the most-played title based on the digital games store Steam’s ranking on Tuesday.
An index tracking the gaming sector fell 1.5 per cent, Huayi Brothers, a major shareholder of the developer, sank 9.9 per cent on Shenzhen Stock Exchange. The game’s publisher Zhejiang Publishing, Shanghai-listed, climbed for a second day.
Other Asian markets also weakened, tracking overnight losses as the US stock benchmark ended an eight-day winning streak. Japan’s Nikkei 225 fell 0.4 per cent and South Korea’s Kospi slipped 0.1 per cent, while Australia’s S&P/ASX 200 declined 0.3 per cent.