Asia report: Chinese tech firms lead slide in Hong Kong

Stock markets in Asia closed in a mixed state on Monday, with Hong Kong’s bourse tumbling almost 3% as Chinese technology plays slid.

In Japan, the Nikkei 225 was ahead 1.11% at 26,812.30, as the yen weakened 0.69% against the dollar to last trade at JPY 137.04.

Automation specialist Fanuc managed gains of 0.05% on the benchmark index, while fashion firm Fast Retailing added 0.94% and technology conglomerate SoftBank Group rose 0.85%.

The broader Topix index advanced 1.44% by the end of trading in Tokyo, settling at 1,914.66.

Public broadcaster NHK reported that Japan’s ruling coalition was looking likely to increase its majority in the House of Councillors.

Voters were heading to the polls for the upper house of the country’s National Diet, two days after former prime minister Shinzo Abe was assassinated while campaigning in the city of Nara, near both Osaka and Kyoto in central Japan.

On the mainland, the Shanghai Composite was 1.27% lower at 3,313.58, and the technology-centric Shenzhen Component was 1.87% weaker at 12,617.23.

Fresh data out of China showed producer inflation rising 6.1% year-on-year in June, down from the 6.4% reading in May, but slightly above the 6% pencilled in by economists polled by Reuters.

Consumer inflation was also slightly higher than Reuters-polled forecasts, coming in at 2.5%, compared to expectations for 2.4%.

South Korea’s Kospi slipped 0.44% to 2,340.27, while the Hang Seng Index in Hong Kong tumbled 2.77% to 21,124.20.

Chinese tech firms were in focus after Beijing regulators issued fines to a number of companies for non-compliance with anti-monopoly disclosure rules.

Those firms included Alibaba Group and Tencent Holdings, according to Reuters, which lost 5.79% and 2.89% respectively, as the Hang Seng Tech Index fell 3.86%.

Gambling operators were also in the red, after it was announced that almost all industrial and commercial business in leisure hotspot Macau would be shuttered for a week amid a fresh Covid-19 outbreak in the special administrative region.

Melco International Development was down 7,13%, Sands China lost 8.15%, and Wynn Macau was off 6.68%.

“Asian markets were in less sanguine form, with the announcement of fines on the likes of Tencent and Alibaba by China due to those companies failing to comply with anti-monopoly rules on transaction disclosures,” said Interactive Investor head of markets Richard Hunter.

“The latest spike in coronavirus cases is also spooking investors, with data due later in the week likely to confirm a sharp contraction in the Chinese economy following a number of lockdowns over the past few months.

“In addition, it was also announced that commercial and industrial businesses in Macau will be closed for a week in an effort to contain the spread of Covid-19, hitting casino stocks in particular.”

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics up 0.17%, while SK Hynix lost 1.16%.

Oil prices were lower at the end of the Asian day, with Brent crude futures last down 1.75% on ICE at $105.15 per barrel, and the NYMEX quote for West Texas Intermediate off 2.21% at $102.47.

In Australia, the S&P/ASX 200 was 1.14% lower at 6,602.20, while across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.56% to 11,106.14.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.98% at AUD 1.4726, and the Kiwi retreating 0.68% to NZD 1.6258.

Reporting by Josh White at Sharecast.com.