Hong Kong stocks tumble as Alibaba’s scrapping of logistic unit IPO weighs on sentiment

The Hang Seng Index fell 1.2 per cent to 16,477.57 as of 9.47am local time. The Hang Seng Tech Index dropped 2 per cent and the Shanghai Composite Index retreated 0.4 per cent.

Alibaba dropped 1.8 per cent to HK$69 after withdrawing the listings application for Cainiao, and instead unveiled plans to buy the remaining shares from the unit’s minority shareholders “to double down on its investment in Cainiao”, given the unit’s “strategic importance”.

“The company originally wanted to separately list Cainiao in the Hong Kong market to unlock value for Baba shareholders,” said Nomura analysts in a note. “However, management conceded that the challenging capital market made this plan very difficult to implement.”

Other major Asian markets were broadly higher. Japan’s Nikkei 225 climbed 0.7 per cent and Australia’s S&P/ASX 200 added 0.3 per cent, while South Korea’s Kospi retreated 0.1 per cent.