China: Street protests over Covid pull down Hong Kong stocks

​Hong Kong stocks witnessed a sharp decline on Monday with the benchmark Hang Seng falling over 3% in morning trade as the unrest in China over Xi Jinping’s COVID-zero policies weighed on the market. Shares of Alibaba and JD.com lost close to 6% in morning trade while EV peers including Nio, Xpeng and Li Auto declined over 5%.

​Macro News: China’s industrial companies witnessed their overall profits fall further in the January-October period as COVID-19 outbreaks rose and cities imposed new virus restrictions, reported Reuters. Industrial profits fell 3% in the first 10 months of 2022 compared to a year earlier, it said.

Following a fire incident in northwestern Urumqi, protests have spread across Shanghai and Beijing against China’s strict ‘zero COVID’ policies. Protesters chanted, “Xi Jinping step down, CCP step down,” referring to the Chinese president and the ruling communist party.

Company News: TikTok has engaged the help of tech startups to boost its struggling e-commerce operations, as it looks to diversify its revenues amid a slowdown in digital advertising, reported Financial Times.

NIO, which has previously confirmed it is making phones, has said its phone project is progressing well, according to William Li, the company’s founder, reported CnEVPost.

Top Gainers and Losers: JD.com and WuXi Biologics (Cayman) Inc. are the top losers among Hang Seng constitutents, having shed over 6% each. There were no gainers on the index on Monday.

Global News: U.S. futures traded in the red on Monday morning Asia session. The Dow Jones futures were down 0.49% while the Nasdaq futures lost 0.91%. The S&P 500 futures were trading lower by 0.68%.

Elsewhere in Asia Pacific, Australia’s ASX 200 was down 0.46%. Japan’s Nikkei 225 traded 0.75% lower while China’s Shanghai Composite index lost 1.7%. South Korea’s Kospi declined by 1.19%.​ ​