** Shares of hypermarket chain Sun Art Retail slump as much as 35.5% to HK$1.60, on track for their biggest one-day pct drop since listing in 2011

** Stock of Sun Art hits the lowest level since Sept. 24; third-biggest pct loser on the Hong Kong bourse

** E-commerce giant Alibaba Group said on Wednesday it had agreed to sell its majority stake in Sun Art to Chinese private equity firm DCP Capital for HK$12.298 bln ($1.58 bln)

** Stake sale part of Alibaba's reshuffling of its business portfolio to focus on its core e-commerce operations

** "The market had expected the sale to happen after the announcement by Sun Art related to possible transactions back in Oct-24," Jefferies said in a note, adding that the sale of Sun Art aligned with strategies

** Hong Kong shares of Alibaba slip 0.7%

** The Hang Seng Commerce & Industry Index falls 1.1%, the Hang Seng Consumption Index eases 1% and the Hang Seng Index drops 1.4%

($1 = 7.7719 Hong Kong dollars)

(Reporting by Donny Kwok)

((donny.kwok@thomsonreuters.com))