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Alibaba Plunges, Xpeng, Nio Nosedive: Fed Rate Hike and Projections Push Hang Seng To 2011 Lows

Hong Kong's benchmark Hang Seng Index lost over 1.9% in opening trade to hit 2011 lows after the U.S. Federal Reserve raised interest rates by 0.75% and indicated they could be hit as high as 4.6% next year. 

That dented stocks of U.S.-listed Chinese EV makers, whose business prospects depend a lot on interest rates. 

Hong Kong Stocks Today
Stock Movement
Alibaba Group Holding Ltd. (NYSE:BABA -3.13% Inc (NASDAQ:JD) -3.3%
Baidu Inc (NASDAQ:BIDU) -3.55%
Tencent Holdings Ltd. (OTC:TCEHY)           -1.3%
Meituan (OTC:MPNGF) -3.34%
Nio Inc (NYSE:NIO) -8.86%
XPeng Inc (NYSE:XPEV) -13.86%
Li Auto Inc (NASDAQ:LI) -6.26%

XPeng shares nosedived 13% at the open, while Nio shed over 8%. Li Auto shares lost over 6%. Higher interest rates mean buying cars would take more money out of a consumer’s pocket in terms of monthly installments.

The Bank of Japan is set to announce its policy decision today.

Also Read: Fed Raises Rates 0.75% For Third Straight Time: 'We Will Keep At It Until We're Confident The Job Is Done'

Goldman Sachs Group Inc. (NYSE:GS) has sharply reduced its 2023 economic growth forecast for China, forecasting that gross domestic product will likely rise 4.5% in 2023, which is down from a previous projection of 5.3%, reported Bloomberg citing a note written by Goldman’s economists.

Taiwan’s government has said it will never permit China to "meddle" in its future after a Chinese government spokesperson said Beijing was willing to make the utmost effort to strive for a peaceful "reunification" with the island, reported Reuters.

Company News: China’s leading online travel service provider Group Limited (NASDAQ:TCOM) reported a second-quarter profit of RMB 43 million ($6 million) compared to a net loss of RMB 659 million ($93.5 million) a year earlier

China Evergrande Group (OTC:EGRNF) said on Wednesday it was mulling transferring some assets to its property unit in order to settle some of the unit's debt payments, reported Reuters.

Top Gainers and Losers: WuXi Biologics (Cayman) Inc. and Galaxy Entertainment Group Limited were the top losers among the Hang Seng constituents, having shed over 3.5%. There were no gainers on Thursday.

Global News: U.S. futures traded in the red on Thursday morning Asia session. The Dow Jones futures were down 0.7% while the Nasdaq futures lost 1.21%. The S&P 500 futures shed 0.93%.

Elsewhere in Asia, Australia’s ASX 200 remained closed on Thursday. Japan’s Nikkei 225 was down 1.16% while China’s Shanghai Composite index lost 0.15%. South Korea’s Kospi was down 1.49%.

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