Alibaba Headlines Dominate In Asia

Hong Kong equity trade provided one of the focal points of a holiday-constrained Asia-Pac session.

• The Hang Seng Tech Index shed over 4.0% in early dealing as participants returned from their elongated weekend. Softer than expected Chinese PMI data released over the weekend applied some pressure, but there was also some idiosyncratic news to factor in. Alibaba shares tumbled by nearly 10% after CCTV reported that China imposed “compulsory measures” on an individual with the surname of Ma, with the matter tied to national security. Speculation did the rounds that the individual involved could be Alibaba founder Jack Ma. We then saw some reprieve for both the tech sector and the wider Hang Seng as it became apparent that Jack Ma was not the individual in question. That, coupled with news of the next stage of relaxation of COVID curbs in Hong Kong, allowed the Hang Seng to recover. The Hang Seng Tech is now 0.5% lower on the day, comfortably above its early session trough, with Alibaba shares now in positive territory. The benchmark Hang Seng index is +0.3%.
• The ASX 200 unwound early losses and is little changed on the session.
• E-mini futures are 0.3-0.5% higher on the day, after the major Wall St. indices recovered Monday’s early losses ahead of the NY close, before pushing higher.
• Elsewhere, it is worth noting that Citi confirmed that its trading desk was behind Monday’s flash crash in Swedish equities. The bank noted that one of its traders “made an error when inputting a transaction. Within minutes, we identified the error and corrected it.”