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Asia report: Markets mostly weaker as Beijing cracks down on Tencent

By Josh White

Date: Monday 26 Jul 2021

Asia report: Markets mostly weaker as Beijing cracks down on Tencent

(Sharecast News) - Most markets in Asia were in the red on Monday, with technology shares in Hong Kong leading the losses amid ongoing regulatory concerns for the sector in China.
In Japan, the Nikkei 225 returned from a two-session holiday to rise 1.04% to 27,833.29, as the yen strengthened 0.22% against the dollar to last trade at JPY 110.31.

Technology conglomerate SoftBank Group slid 2.13%, while among the benchmark's other major components, automation specialist Fanuc was up 0.5% and fashion firm Fast Retailing added 0.92%.

The broader Topix index was ahead 1.11% by the end of trading in Tokyo, settling at 1,925.62.

On the mainland, the Shanghai Composite was down 2.34% at 3,467.44, and the smaller, technology-heavy Shenzhen Composite was 2.28% weaker at 2,411.81.

Sentiment in the People's Republic was knocked by a tense beginning to a high-level meeting between the world's largest economies, as Washington's deputy secretary of state opened dialogue with Beijing's deputy foreign minister.

The ministry in China said that the relationship with the US was now "in a stalemate" and facing "serious difficulties" in an English-language press release on Monday.

South Korea's Kospi was off 0.91% at 3,224.95, while the Hang Seng Index in Hong Kong plunged 4.13% to 26,192.32.

Among the technology plays in the special administrative region, Alibaba was down 6.38%, Meituan lost 13.76%, and Tencent was off 7.72%.

Those losses came on the back of fresh regulatory concerns for China's technology sector, with Beijing's regulators issuing Tencent with a fine as it ordered it to give up music licensing rights.

Tech stocks were on the back foot in Seoul as well, with Samsung Electronics down 0.63%, and SK Hynix losing 1.27%.

Joshua Mahony, senior market analyst at IG, described the session in Asia as "rather dramatic".

"The implementation of a fresh regulatory crackdown from the central government put further pressure on tech and education stocks," he explained.

Oil prices were lower at the end of the Asian day, with Brent crude last down 0.42% at $73.79 per barrel, and West Texas Intermediate losing 0.56% to $71.67.

In Australia, the S&P/ASX 200 slipped 0.001% to 7,394.30, and across the Tasman Sea in New Zealand, the S&P/NZX 50 was 0.5% lower at 12,673.23.

The down under dollars were in a mixed state against the greenback, with the Aussie last 0.07% weaker at AUD 1.3585, while the Kiwi was stable at NZD 1.4333.

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