Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Hong Kong — Asia’s stock markets fell to fresh troughs on Tuesday led by a third straight session of heavy selling in Chinese internet giants, while bond and currency markets traded on edge ahead of the Federal Reserve policy meeting.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.25% to its lowest level since mid-December, extending a low set the day before.
The Hong Kong benchmark fell 0.59%, its third day of declines, with the Hang Seng tech index down 2% to its lowest since its inception in July 2020. It is down about 11% in three days and has lost 40% from a February peak.
Big decliners included Meituan and Alibaba, whose shares fell 8.15% and 3.38% respectively. Both were down for the third day in succession with investors expecting the companies’ food delivery arms to be affected by new regulations guaranteeing workers above minimum pay.
In onshore markets, Chinese bluechips fell 0.26% after closing on Monday at their lowest since December thanks to regulatory crackdowns in the education and property sectors.
“The market seems to be uncertain whether there will be more policy changes for fintech, social media platforms, delivery platforms and ride hailing platforms,” said Iris Pang, chief economist for Greater China at ING. “Each has their own issue and faces different regulatory actions, so the market is looking for ‘which technology subsector will be next?’”
Elsewhere in Asia, markets were a little more optimistic, with Japan’s Nikkei rising 0.35%, and Australian shares up 0.54%. S&P 500 futures dipped 0.1% and Euro Stoxx 50 futures were broadly steady.
US corporate earnings and the Federal Reserve’s monetary policy meeting were also on investors’ minds.
“It’s profits and the Fed. The next couple of days are going to be monumental as everyone tries to figure out how strong corporate fundamentals are at the moment and in what context that is happening in terms of the economic outlook and policy settings,” said Kyle Rodda, market analyst at IG Markets.
Alphabet, Apple and Microsoft are due to publish quarterly results late on Tuesday, with Amazon.com’ due later in the week.
In addition, the Federal Reserve will begin its two-day meeting later on Tuesday, with investors set to scrutinise a statement and press conference from Fed chair Jerome Powell due late on Wednesday. They will be looking to see how the central bank will balance fast-rising prices with the complication of increased coronavirus infections.
All three major US stock indices eked out record closing highs for a second straight session on Monday but S&P 500 futures dropped 0.14%. The looming Fed meeting kept a dampener on moves in other asset classes.
The dollar hovered a little below recent highs, with the euro and sterling gaining ground, the latter helped by a decline in new daily Covid-19 cases in the UK.
US Treasury yields rose in early Asian trading on Tuesday, after a choppy Monday. The yield on benchmark 10-year Treasury notes was 1.2812% compared with its US close of 1.276%, while the two-year yield touched 0.2134% compared with a US close of 0.196%.
Gold was slightly higher, with spot gold trading at $1,797.28 an ounce, while US crude ticked up 0.43% to $72.22 a barrel.
Bitcoin dropped to below $37,000 from a Monday peak of $40,581 after Amazon.com offered a qualified denial of a weekend news report that said it was preparing to accept cryptocurrencies.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Asian stocks fall to seven-month low
Hong Kong — Asia’s stock markets fell to fresh troughs on Tuesday led by a third straight session of heavy selling in Chinese internet giants, while bond and currency markets traded on edge ahead of the Federal Reserve policy meeting.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.25% to its lowest level since mid-December, extending a low set the day before.
The Hong Kong benchmark fell 0.59%, its third day of declines, with the Hang Seng tech index down 2% to its lowest since its inception in July 2020. It is down about 11% in three days and has lost 40% from a February peak.
Big decliners included Meituan and Alibaba, whose shares fell 8.15% and 3.38% respectively. Both were down for the third day in succession with investors expecting the companies’ food delivery arms to be affected by new regulations guaranteeing workers above minimum pay.
In onshore markets, Chinese bluechips fell 0.26% after closing on Monday at their lowest since December thanks to regulatory crackdowns in the education and property sectors.
“The market seems to be uncertain whether there will be more policy changes for fintech, social media platforms, delivery platforms and ride hailing platforms,” said Iris Pang, chief economist for Greater China at ING. “Each has their own issue and faces different regulatory actions, so the market is looking for ‘which technology subsector will be next?’”
Elsewhere in Asia, markets were a little more optimistic, with Japan’s Nikkei rising 0.35%, and Australian shares up 0.54%. S&P 500 futures dipped 0.1% and Euro Stoxx 50 futures were broadly steady.
US corporate earnings and the Federal Reserve’s monetary policy meeting were also on investors’ minds.
“It’s profits and the Fed. The next couple of days are going to be monumental as everyone tries to figure out how strong corporate fundamentals are at the moment and in what context that is happening in terms of the economic outlook and policy settings,” said Kyle Rodda, market analyst at IG Markets.
Alphabet, Apple and Microsoft are due to publish quarterly results late on Tuesday, with Amazon.com’ due later in the week.
In addition, the Federal Reserve will begin its two-day meeting later on Tuesday, with investors set to scrutinise a statement and press conference from Fed chair Jerome Powell due late on Wednesday. They will be looking to see how the central bank will balance fast-rising prices with the complication of increased coronavirus infections.
All three major US stock indices eked out record closing highs for a second straight session on Monday but S&P 500 futures dropped 0.14%. The looming Fed meeting kept a dampener on moves in other asset classes.
The dollar hovered a little below recent highs, with the euro and sterling gaining ground, the latter helped by a decline in new daily Covid-19 cases in the UK.
US Treasury yields rose in early Asian trading on Tuesday, after a choppy Monday. The yield on benchmark 10-year Treasury notes was 1.2812% compared with its US close of 1.276%, while the two-year yield touched 0.2134% compared with a US close of 0.196%.
Gold was slightly higher, with spot gold trading at $1,797.28 an ounce, while US crude ticked up 0.43% to $72.22 a barrel.
Bitcoin dropped to below $37,000 from a Monday peak of $40,581 after Amazon.com offered a qualified denial of a weekend news report that said it was preparing to accept cryptocurrencies.
Reuters
China stocks in US suffer worst wipeout since 2008
Market data — July 26 2021
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
MARKET WRAP: JSE flat after tug of war between industrials and miners
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.