Chinese e-commerce giant Alibaba’s shares traded 0.9 percent lower at HKD 122.30 ($15.68) in Hong Kong, while peer JD.Com’s shares have risen 0.8 percent to HKD 313.40 ($40.18) .
Technology company Baidu’s shares have lost 1.2 percent to HKD 145.40, ($18.64) while tech conglomerate Tencent’s shares are down 0.3 percent to HKD 471.40 ($60.44).
Electric vehicle maker Xpeng’s shares have fallen 3.6 percent to HKD 182.00 ($23.33) and peer Li Auto’s shares traded 1.0 percent lower at HKD 123.20 ($15.79).
Hong Kong’s benchmark Hang Seng Index opened lower on Friday and was down 0.4 percent at the time of writing. The index closed almost 1.1 percent higher on Thursday.
Why It’s Moving
The Hang Seng Index fell after three straight days of gains as Chinese property developers China Evergrande Group and Kaisa Group Holdings Ltd. officially defaulted on their dollar debt.
Fitch Ratings downgraded Evergrande and Kaisa to “restricted default” after the two companies missed key deadlines and failed to make payments on dollar bonds this week.
The failures could trigger a cross-default in debt owed by the two developers. Evergrande has $19.2 billion of dollar bonds outstanding while Kaisa owes $11.6 billion, according to a report by Bloomberg.
In addition, the Chinese yuan fell after the People’s Bank of China (PBOC) raised the reserve requirement ratio on foreign currencies for a second time this year, Reuters reported.
The move is seen as an attempt by the central bank to slow the rapid appreciation of the yuan, which has risen more than 2 percent against the dollar since late July.
The offshore yuan traded at 6.3720 per dollar, its weakest level this month.
Shares of Chinese companies closed mostly lower in U.S. trading on Thursday after the major averages in the United States ended mostly lower following three straight days of gains. Investors turned cautious as they looked ahead to the release of key U.S. inflation data on Friday.
Alibaba’s shares closed 0.9 percent lower, while Nio’s shares ended lower by almost 2.9 percent.
By Madhukumar Warrier
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