Asian shares skidded to their lows for this year on Monday as concerns over tightening regulations upended Chinese equities and strong U.S. corporate earnings sucked funds out of emerging markets into Wall Street.
Chinese blue chips .CSI300 shed 4.4% to their lowest since December, in what was also the biggest daily decline in more than a year, as the education and property sectors were routed on worries over tighter government rules.
That dragged MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS down 2.0% to its lowest since last December.
· Hong Kong’s Hang Seng index drops 4% as China tech and education shares plunge
Shares in Hong Kong dropped sharply in Monday afternoon trade, as Chinese tech and education stocks plunged on regulatory pressure and a summit between China and the United States got off to an acrimonious start.
The broader Asia-Pacific markets were largely lower, with mainland Chinese stocks also falling.
The Hang Seng index in Hong Kong fell 4% as of its final hour of trading, leading losses in the region.
Hong Kong-listed shares of Chinese tech giant Tencent slipped 7.19% in Monday afternoon trade. Alibaba also dropped 5.7% while Meituan fell 11.13%. The Hang Seng Tech index plunged 5.88%.
Those losses came after China’s antitrust regulator ordered Tencent to give up its exclusive music licensing rights and slapped a fine on it for anti-competitive behavior, marking yet another development in Beijing’s ongoing crackdown on its domestic internet titans.
Shares of private education firms listed in Hong Kong also tumbled as Chinese authorities also stepped up restrictions on the sector. New Oriental Education & Technology Group, Koolearn Technology and China Beststudy Education Group all saw their shares plummeting more than 30% each.
· Chinese stocks fall as tensions with U.S. rise
Mainland Chinese stocks also saw sizable declines on Monday, with the Shanghai composite down 2.34% to 3,467.44 while the Shenzhen component fell 2.646% to 14,630.85.
Geopolitical tensions between Washington and Beijing may have weighed on investor sentiment, as a high-level meeting between the two economic powerhouses got off to an acrimonious start.
China’s vice foreign minister said during Monday talks with the U.S. deputy secretary of state that the two countries’ relationship is “now in a stalemate and faces serious difficulties,” according to an English-language press release from China’s Ministry of Foreign Affairs.
In other markets, South Korea’s Kospi closed 0.91% lower at 3,224.95. In Australia, the S&P/ASX 200 ended the trading day flat at 7,394.30.
· Japanese shares track global peers higher, but virus woes cap gains
Japanese shares rose on Monday, as they caught the tailwind from a bounce in global peers on positive corporate earnings, though gains were curbed by investor concerns that a surge in domestic COVID-19 infections could dampen economic recovery.
Nikkei average rose as much as 1.77% in early trade after a four-day weekend that marked the opening of Tokyo Olympics, before shedding a part of the gains to trade 1.30% higher at 27,906.28.
The broader Topix was up 1.31% at 1,929.34, after having risen 1.74% earlier in the session. During the long weekend in Japan, all three major U.S. stock indexes closed at record highs.
· European stocks retreat as investors watch corporate earnings, Covid cases
European stocks pulled back Monday, tracking lackluster global sentiment as investors monitored corporate earnings and looked ahead to a key meeting of the U.S. Federal Reserve.
The pan-European Stoxx 600 fell 0.4% in early trade, with autos shedding 1.4% to lead losses while basic resources was the sole sector in positive territory, gaining 0.8%.
· Dow futures fall more than 200 points ahead of a huge week of Big Tech earnings
Stock futures slipped after the major averages finished the previous session at record closing highs and ahead of a busy week of earnings reports from technology’s heaviest hitters.
Dow Jones Industrial Average futures declined 222 points. S&P 500 and Nasdaq 100 futures also both traded in negative territory.
Reference: CNBC, Reuters
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