Shares of China’s ‘BAT’ Trio Drop as Tech Faces Renewed Rate Risks

By Ambar Warrick

Investing.com-- Hong Kong-listed shares of Chinese technology giants Baidu Inc (HK:9888), Alibaba Group Holding Ltd (HK:9988) and Tencent Holdings Ltd (HK:0700) fell sharply on Monday, with tech stocks facing more pressure amid growing expectations of a sharp U.S. rate hike.

The three- known as China’s “BAT” trio, dropped between 2% and 4% in morning trade. They dragged the Hang Seng TECH index down 1.7%, and also weighed on Hong Kong’s benchmark index. The three are also a bellwether for sentiment towards technology stocks in Asia.

Technology stocks face renewed pressure this week after substantially stronger than expected U.S. payrolls data on Friday ratcheted up expectations that the Fed would hike rates by a large margin during its September meeting.

The dollar rallied 0.9% after the data, while U.S. 10-year Treasury yields jumped to a one-month high. The NASDAQ Composite slumped 0.5% on Friday, with Nasdaq 100 Futures indicating a muted open today.

Rising interest rates discount the future earnings of tech companies, making their stock valuations appear less attractive. This trend has walloped the tech sector in 2022, as the Fed raised rates four times this year- most recently in July.

Rate-hike risks are set to deepen this week, ahead of key monthly U.S. CPI inflation data due on Wednesday. While the reading is expected to have eased slightly in July from the prior month, any indication of inflation remaining elevated is bound to further dent tech stocks.

This has hurt the valuations of Alibaba Group Holdings Ltd ADR (NYSE:BABA) and Baidu Inc's (NASDAQ:BIDU) U.S. listings, with the former touching a record low this year.

In addition to macroeconomic headwinds, the BAT trio is also facing increased government scrutiny in their biggest market, China.

Crackdowns against big tech in the mainland- starting from 2021- have severely dented the valuation of the three, which at one point, were the most valuable companies in Asia.

Begin trading today! Create an account by completing our form

Privacy Notice

At One Financial Markets we are committed to safeguarding your privacy.

Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.

Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.

Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.

By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.6% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Back to top

Office network
  • London Office
    One Financial Markets 

    1 Finsbury Market
    London
    EC2A 2BN
    United Kingdom


    T:  + 44 ( 0 ) 203 857 2000
    E:  info@ofmarkets.com
  • Dubai Office
    One Financial Markets 
    OT19-39 Central Park Tower
    Dubai International Finance Centre
    Dubai
    United Arab Emirates
     
    T: + 00 971 44 22 888
    E:  info@ofmarkets.com
     

One Financial Markets is the trading name of Axi Financial Services (UK) Ltd, a company registered in England with company number 6050593. Axi Financial Services Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Sector Conduct Authority in South Africa (with FSP number 45784).

The information on this site is not directed at residents of the United States, Belgium, Poland or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

www.onefinancialmarkets.com is owned and operated by Axi Financial Services (UK) Ltd.

Award winning broker
We have been presented with a number of awards that recognise the quality of our service and dedication to our clients :

Best FSA Regulated Broker
Saudi Money Expo

Best Education Product
Saudi Money Expo

Best Broker - Online Trading
IAIR Awards

Best Institutional Broker
Saudi Money Expo

Best FX Services Broker
CN Forex

Top International
FX Broker 2015

Saudi Money Expo

Broker of the Year
Online Trading – Middle East

IAIR Awards

Best Forex
Customer Service 2018

JFEX Awards

We accept the following payment methods: