Asia report: Most markets lower as Beijing turns up heat on tech

Most stock markets closed in negative territory in Asia on Wednesday, with technology plays following their Wall Street counterparts downwards as rising bond yields put pressure on the sector.

In Japan, the Nikkei 225 managed gains of 0.1% to 29,332.16, as the yen strengthened 0.4% on the dollar to last trade at JPY 115.69.

Robotics specialist Fanuc rose 1.73%, while among the benchmark’s other major components, Uniqlo owner Fast Retailing lost 1.28% and technology investing giant SoftBank Group was off 1.13%.

The broader Topix index was ahead 0.45% by the end of trading in Tokyo, settling at 2,039.27.

On the mainland, the Shanghai Composite lost 1.02% to 3,595.18, and the smaller, technology-centric Shenzhen Composite slid 1.74% to 2,483.69.

China Mobile rose 0.52% on its Shanghai debut, in what was reported to be the largest public offering on the mainland in 10 years.

The state-controlled mobile network operator was also in the green in Hong Kong, where it advanced 3.33%.

South Korea’s Kospi was off 1.18% at 2,953.97, while the Hang Seng Index in Hong Kong was down 1.64% at 22,907.25.

Chinese technology and content giant Tencent was 4.31% lower in the special administrative region, after it announced it would divest 2.6% of its holding in Singapore-based internet firm Sea Limited.

Other tech names were also in the red in Hong Kong, with Kuaishou tumbling 7.53% and Meituan plunging 11.16%.

The moves came after yet another tightening of the regulatory screws by Beijing, which said earlier in the day that it had fined certain divisions of Alibaba, Bilibili and Tencent for not reporting deals correctly.

Regulators also revealed planned rules for mobile apps, which would include the need for a security review and approval if they included features which could possibly affect public opinion.

The blue-chip technology stocks were in the red in Seoul as well, with Samsung Electronics down 1.65% and SK Hynix off 2.33%.

Rising bond yields tend to put pressure on technology shares in particular, as earnings from the sector are deemed less attractive when yields move higher.

Overnight, yields on the 10-year US Treasury note were seen rising at their most rapid clip in 20 years, reaching as high as 1.71% during the session on Wall Street.

“The risk-on start to 2022 is taking a breather, with Asian stocks seeing mixed performance while US and European equity futures are in the red,” said Exinity chief market analyst Han Tan as Asian bourses ran their closing auctions.

“Typical safe havens are faring better so far today with the US dollar holding steady, gold rising, while the Japanese yen is the best performing G10 currency.

“This year, market participants are primarily framing their outlook around how inflation informs the Fed on when to raise rates, as the world continues to battle against Covid-19 and record infections.”

Oil prices were lower as the region went to bed, with Brent crude last down 0.13% at $79.90 per barrel, and West Texas Intermediate off 0.2% at $76.84.

In Australia, the S&P/ASX 200 was 0.32% weaker at 7,565.80, while across the Tasman Sea, New Zealand’s S&P/NZX 50 rose 0.89% after an afternoon rally to end the day at 13,150.38.

The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.18% at AUD 1.3785, and the Kiwi advancing 0.1% to NZD 1.4672.