Shares of $BABA-SW(09988.HK)$, $NIO-SW(09866.HK)$ and $Li Auto-W(02015.HK)$ lost more than 3% on Wednesday morning with the Hong Kong's benchmark index $Hang Seng Index(800000.HK)$ falling over 1%, ahead of the release of Australia's inflation report. The Australian Bureau of Statistics' forecast indicates a steep incline in inflation, reported 7News.

The dampened mood in Asia also follows a weak Tuesday on Wall Street that saw $Walmart(WMT.US)$ cut its earnings forecast. Investors are also bracing for a potential 75 bps rate hike by the U.S. Fed on Thursday.

Macro News: Hong Kong's finance chief has indicated the city could see a rise in interest rates, although the pace may not follow the Fed's rate hike path and would not likely lead to a property market crisis, the South China Morning Post reported.

The liquidity in the Chinese banking system has increased significantly in the backdrop of falling loan demand which has led to banks lending record amounts of money to each other, reported Bloomberg.

Company News: Alibaba has scaled back its global expansion plan as the firm's U.S. operation failed to meet its targets, the Financial Times reported. The project was also affected by dozens of staff departing from the e-commerce giant's New York office.

$TENCENT(00700.HK)$ has become the number one gaming company by making 180 smaller and strategic investments, leaving behind Sony and Microsoft, reported Nikkei Asia.

After Alibaba announced plans to apply for a primary listing in Hong Kong, e-commerce player JD.com and tech giant Baidu may follow suit, reported Bloomberg.

$XPENG-W(09868.HK)$'s users have complained of false warnings from its driver monitoring systems due to their eyes being too small, CnEVPost reported.

Global Markets: U.S. markets ended Tuesday in the red after retail giant Walmart trimmed its earnings forecast, taking the stock down 7.64%. Other retailers like $Kohl's Corp(KSS.US)$and $Target(TGT.US)$ followed suit, plunging 9.13% and 3.63%, respectively. The Dow Jones Industrial Average closed down 0.71%. The $Nasdaq Composite Index(.IXIC.US)$ index fell 1.87%, while the $S&P 500 index(.SPX.US)$ lost 1.15%.

Elsewhere in Asia, Australia's ASX 200 traded flat in Wednesday's opening trade. Japan's Nikkei 225 traded lower at 0.06%, while the South Korean Kospi fell 0.55%. China's Shanghai Composite index shed 0.15%.