• Nasdaq falls as tech stocks turmoil ‘bleeds’ into US prices
• Apple, Google-parent Alphabet and Microsoft all announce upbeat results
Asia’s markets suffered again on Wednesday as fears over China’s regulatory crackdown continued to reverberate around trading floors.
There was also a markets reaction to speculation some companies might struggle to maintain the recent run of blockbuster earnings results that have helped to send valuations soaring.
Hong Kong and Shanghai were in focus after suffering a tough three days in the wake of Beijing’s latest series of measures aimed at bringing the tech and private tuition sectors to heel.
The struggles in Asia were reflected in New York, where the Nasdaq led losses. And while some of the selling was down to profit-taking after all three indexes had hit records on consecutive days, analysts said unease about China’s moves played a role.
“The turmoil in tech stocks in China is finally bleeding into US tech stocks,” said Chris Murphy, of Susquehanna International Group.
Murphy’s comments came as Apple, Google-parent Alphabet and Microsoft all announced better-than-expected results, but their after-hours share prices dropped.
“The key takeaway from this wrath of earnings was that risk appetite will likely struggle going forward given the persistent struggles with supply chains, concerns over growth in China, and uncertainty over how much more monetary and fiscal support this economy will see,” said OANDA’s Edward Moya.
Eyes will be on the Federal Reserve’s latest policy meeting, which ends later on Wednesday, for any hints on its plans for the economic recovery.
Hong Kong rose having oscillated wildly but it made only a small dent in the more than 9% drop suffered over the previous three days.
Tuition firms enjoyed some respite but tech giant Tencent continued to suffer selling pressure, with further stress on the firm after China ordered developers to address problems linked to pop-ups in their apps.
The Hang Seng Index climbed 1.54%, or 387.45 points, to 25,473.88. The benchmark Shanghai Composite Index dropped 0.58%, or 19.59 points, to 3,361.59, while the Shenzhen Composite Index on China’s second exchange shed 0.78%, or 18.23 points, to 2,313.20.
There were also losses in Tokyo, Sydney, Singapore, Taipei, Manila, Mumbai and Jakarta. Seoul and Wellington inched higher.
The benchmark Nikkei 225 index ended down 1.39%, or 388.56 points, at 27,581.66, while the broader Topix index slipped 0.95%, or 18.39 points, to 1,919.65.
Chinese mainland state media looked to soothe investor nerves, saying markets were likely to stabilise soon and that the new rules would prove beneficial to the economy in the long term.
Securities Times said in a front-page editorial that the sell-off had “to an extent, reflected the misreading of policies and venting of sentiment by some funds” but that economic fundamentals were unchanged.
Meanwhile, the China Securities Journal said there was no need for pessimism while the Shanghai Securities News cited analysts saying the falls provided decent buying opportunities.
Bitcoin was sitting at around $39,500 following a recent rally that helped it briefly break $40,000, boosted by renewed support from tycoon Elon Musk and other investors, with some analysts saying it could test the $45,000 mark again.
Tokyo – Nikkei 225: DOWN 1.4% at 27,581.66 (close)
Hong Kong – Hang Seng Index: UP 1.5% at 25,473.88 (close)
Shanghai – Composite: DOWN 0.6% at 3,361.59 (close)
New York – Dow: DOWN 0.2% at 35,058.52 (close)
- Reporting by AFP