Hong Kong shares drop more than 2% as Tencent cuts Meituan stake; Japan has a trade deficit of $15 billion

Hong Kong listed shares of NetEase plunged 13% after Blizzard Entertainment, a subunit of ActivisionBlizzardsaid it would suspend gaming services in China, citing the expiration of licensing agreements with NetEase.

“We are extremely grateful for the passion our Chinese community has shown throughout the nearly 20 years we have brought our games to China through NetEase and other partners,” Blizzard said in a statement.

The company said the current license expires on January 23.

– Jihye Lee

Tencent said the share tranche represents about 90.9% of its stake in the company and 15.5% of the total shares Meituan had issued as of Oct. 31. Tencent said the stake was worth about 159 billion Hong Kong dollars (about $20.32 billion). Tuesday closing.

Shares of Tencent also fell more than 3% in the first hour of Hong Kong trading. The company posted a decline in quarterly revenue after Wednesday’s close.

– Jihye Lee

Australia’s unemployment rate stood at 3.4% in October, slightly lower than 3.5% a month ago, according to the Australian Bureau of Statistics.

The country recorded a total increase of 16,800 net jobs from the previous month, the statement said.

The latest figures follow a 1% increase in wages reported for the last quarter, showing the strongest growth since the March 2012 quarter, according to a separate statement from the ABS.

– Jihye Lee

Singapore’s sovereign wealth fund, Temasek, has announced that it will write down its entire investment in FTX after the company’s rapid collapse last week.

The public investor said in a statement that “given FTX’s financial condition, we have decided to write down our entire investment in FTX regardless of the outcome of FTX’s bankruptcy protection filing.”

Temasek said the cost of his investments in FTX was less than 0.1% of the net worth of his 403 Singapore dollar ($294 billion) portfolio – holding less than 1% in FTX International and less than 1.5 % in FTX US.

“There have been misperceptions that our investment in FTX is an investment in cryptocurrencies. To clarify, we currently have no direct exposure to cryptocurrencies,” the company said.

– Jihye Lee

Japan reported a bigger-than-expected trade deficit of 2.16 trillion yen ($15.5 billion), according to the latest statement from its finance ministry. Economists had expected a deficit of $11 billion, according to a Reuters poll.

Exports rose 25.3% to 9 trillion yen in October from the same period last year, while imports jumped 53.5% to 11.16 trillion yen.

– Jihye Lee

Several retail stocks were down Wednesday morning on Target’s weak financial results and sales outlook.

The target itself was down 15% shortly after the opening bell. Nordstrom suffered a 9% drop, while Macy’s and Gap each fell about 7%.

The SPDR S&P Retail ETF fell 3.9%.

Lowe’s shares rose 3.8%, however, after the company said it raised its full-year earnings forecast and reported strong results. Walmart held on to a 1% gain after reporting strong results on Tuesday. Costco has forged its way into positive territory.

—Tanaya Machel

The 10-year Treasury yield temporarily fell below 3.7%, and the spread between it and the 2-year yield continued to sink further into negative territory.

This so-called reversal in yields is a recession warning. The 10-year was 3.73% in afternoon trading, after falling to 3.69%. The 2-year Treasury note was at 4.35%.

“I still think there is more downside risk from here. The 2s/10s line reversal is negative 67. It could go to minus 75 in the near term,” said Ian Lyngen of BMO.

He said a next target for the 10-year yield would be 3.55%. Yields fall as bond prices rise.

“A big impetus behind the rally is that the market is looking beyond the current tightening cycle and starting to get increasingly nervous about the potential for a bigger fallout, as the Fed continues to reiterate its willingness to do bring the economy into recession,” Lyngen said.

-Patti Domm

Chinese tech giant Tencent is expected to release its third quarter results late in Asia.

The company is expected to see another drop in revenue after recording the first-ever drop in revenue during the previous quarter ending in June. A median forecast from Refinitiv calls for a 0.47% drop to 141.7 billion Chinese yuan ($20 billion).

Separately, sources told Reuters that Tencent is starting a new round of job cuts. The news comes as tech companies around the world announce layoffs.

Shares of Tencent rose 3% in early trade and last rose 0.83%, against a 0.81% decline overall Hang Seng index.

—Abigail Ng, Jihye Lee