Asia report: Hong Kong tech shares lead Monday gains

Most markets closed in positive territory in the Asia-Pacific region on Monday, with Chinese technology plays soaring in Hong Kong on fresh regulatory developments.

In Japan, the Nikkei 225 was up 0.56% at 27,915.89, as the yen strengthened 0.11% on the dollar to last trade at JPY 130.73.

Technology conglomerate SoftBank Group was down 0.5%, while among the benchmark’s other major components, automation specialist Fanuc was 1.26% firmer and fashion firm Fast Retailing jumped 2.77%.

The broader Topix index was 0.31% firmer by the end of trading in Tokyo, closing at 1,939.11.

On the mainland, the Shanghai Composite was 1.28% higher at 3,236.37, and the technology-heavy Shenzhen Component jumped 2.66% to 11,938.12.

The unofficial Caixin services purchasing managers’ index (PMI) came in at 41.4 for May, beating the 36.2 reading in April but still below the 50-point level that separates expansion from contraction.

Beijing’s official non-manufacturing PMI, released last week, similarly improved to 47.8 from 41.9.

The Caixin data sets are widely seen as more reflective of small-to-medium enterprise in China, while the official readings are focussed on large, state-affiliated industry.

South Korea’s traders had the day off for the Memorial Day holiday, while the Hang Seng Index in Hong Kong jumped 2.71% to 21,653.90.

Tech shares led the gains in the special administrative region, after the Wall Street Journal reported that regulators were close to finishing their year-long investigation into three US-listed firms.

The companies include ride-hailing app Didi, logistics provider Full Truck Alliance, and recruitment platform Kanzhun.

According to the WSJ, authorities in Beijing could allow the three firms back onto domestic app markets as soon as this week, after they were removed in July amid “national security” probes.

Oil prices were higher at the end of the Asian day, with Brent crude futures last up 0.69% on ICE at $120.55 per barrel, and West Texas Intermediate rising 0.68 to $119.68 on NYMEX.

“The picture across Asian markets was, at least temporarily, markedly different,” said Interactive Investor head of markets Richard Hunter of the situation on Monday morning.

“The gradual lifting of Covid-19 restrictions in China has led to hopes for a return of demand and consumer confidence, with the authorities still poised to offer monetary assistance as and when required in an effort to help the economy make up for lost ground.

“Coupled with the potential of returning demand, supply in the oil market remains noticeably restricted, with the latest price hike from Saudi Arabia offsetting any relief from additional output increases from the OPEC+ members.

“The oil price is now ahead by 55% in the year to date, inevitably adding to concerns of more prolonged and persistent inflation.”

In Australia, the S&P/ASX 200 was the region’s odd one out, slipping 0.45% to 7,206.30, while across the Tasman Sea, traders in New Zealand were enjoying the Queen’s Birthday long weekend.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.27% at AUD 1.3835, and the Kiwi advancing 0.44% to NZD 1.5301.

Reporting by Josh White at Sharecast.com.