Type to search

Beijing’s Didi probe and virus fears spoil the mood in Hong Kong and Tokyo

China’s move on ride-hailing firm Didi and rising Covid cases across the region dampened enthusiasm in Asia’s major markets while Wall Street enjoyed another soaraway day

Asian markets were hit by hawkish comments by Fed chair Jay Powell who warned that US rates may need to be hiked higher.
Hong Kong was hit hard by hawkish comments by Fed chair Jay Powell, who warned on Tuesday that US rates may need to be hiked higher to contain inflation. Reuters file photo.

China’s move on ride-hailing firm Didi and rising Covid cases across the region dampened enthusiasm in Asia’s major markets while Wall Street enjoyed another soaraway day


Hong Kong stocks sank on Monday following Beijing’s crackdown on mainland ride-hailing giant Didi Chuxing and two other US-listed Chinese companies.

Fears of further moves against the tech sector meant the island’s traders could only watch another Wall Street record day, sparked by a blockbuster US jobs report that reaffirmed the country’s recovery was on track.

All three main indexes in New York finished last week at a fresh peak in reaction to data showing far more people than expected were employed last month in the United States, as the world’s top economy races out of last year’s pandemic-induced recession.


Also on AF: Vitasoy shares plunge amid anger over mourning for worker who stabbed HK cop


The Labor Department report was seen as providing the best of both worlds for investors as it also showed the unemployment rate ticking up slightly, tempering worries that the Federal Reserve will have to rein in its ultra-loose monetary policy sooner to prevent the economy from overheating.

The healthy advances on Wall Street did provide some Asian traders with a platform, and most markets extended the rally. Shanghai, Sydney, Seoul, Taipei, Singapore, Wellington, Manila and Mumbai all rose.

But Hong Kong fell, after China at the weekend ordered ride-hailing outfit Didi to be removed from app stores, citing “serious violations” of data collection regulations.

The move which came just days after the firm’s US market debut following a $4.4 billion initial public offering – is the latest in China’s crackdown on the tech sector as authorities grow concerned about its increasing influence on consumers.



Tencent fell 3.6% in Hong Kong while Alibaba shed close to 3%. The Hang Seng Index overall fell 0.59%, or 166.92 points, to 28,143.50.

But the benchmark Shanghai Composite Index added 0.44%, or 15.56 points, to 3,534.32, while the Shenzhen Composite Index on China’s second exchange rose 0.74%, or 17.62 points, to 2,414.40.

SoftBank, a major investor in Didi, tanked more than 5% in Tokyo, where the Nikkei also finished in negative territory, mainly because of worries over rising coronavirus case numbers.

The Nikkei 225 index dropped 0.64%, or 185.09 points, to 28,598.19 while the broader Topix index slipped 0.37%, or 7.32 points, to 1,948.99.



Traders, though, remain broadly upbeat about the longer term, with the feeling that equities are on course for more gains this year as central banks maintain their accommodative policies and governments push out stimulus measures.

That, along with the rollout of vaccines, is helping offset concerns about rising cases of the more transmissible Delta coronavirus variant.

“Markets are priced for the continuation of a scenario that could not be better constructed,” said Chris Iggo from AXA Investment Managers.



“Investors are living with risks that are seen to be manageable while growth and the technical set-up of our financial system is rewarding capital allocated to risk.”

Oil markets edged up slightly as the United Arab Emirates battled with OPEC and other producers over the rate and time of lifting output.

Officials have laboured for days over an agreement to pump more as demand picks up with the global recovery and supplies shrink, with fears that failure to find common ground could send prices soaring. Prices remain around levels not seen since 2018.



Tokyo – Nikkei 225: DOWN 0.6% at 28,598.19 (close)

Hong Kong – Hang Seng Index: DOWN 0.6% at 28,143.50 (close)

Shanghai – Composite: UP 0.4% at 3,534.32 (close)

New York – Dow: UP 0.4% at 34,786.35 (close)


  • Reporting by AFP


Read more:

China’s tech crackdown widens as more US-listed companies targeted

Japan’s digital yen ‘must be compatible with other developed nations’



Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


AF China Bond