Asian markets are mixed, but traders are nervous following China’s crackdown.
Asian markets were uneven Tuesday, with investors keeping a careful eye on China following its latest crackdown on a variety of sectors, with confidence at a premium after the previous day’s sell-off.
Analysts say that the announcement of new laws on the tutorial business, which has destroyed private education firms, as well as increased actions against internet firms and new rules for property and food delivery companies, has traders worried about where Beijing will strike next.
This comes amid growing concerns about the Delta Covid variant’s rapid spread and the sluggish introduction of vaccines, prompting some governments to impose new lockdowns or other containment measures.
Meanwhile, the highest-level China-US negotiations held under the Biden administration ended with little progress in addressing their disagreements, implying that tensions between the two countries will remain high.
After investors were worried by Beijing’s latest effort to tighten its grip on the economy, Hong Kong extended Monday’s slide of more than 4% in early trade.
It announced over the weekend that it would make it practically impossible for companies that teach school curriculums to make a profit, raise finance, or go public.
Officials also sought to bring in tech giant Tencent, while also announcing new measures to safeguard delivery drivers who are underpaid.
Rodrigo Catril of National Australia Bank remarked, “China’s regulatory uncertainty is not going away.” “Indeed, it appears to be expanding, with no clear indication of when or where it will end.”
Tutorial enterprises listed on the Hong Kong Stock Exchange fell again on Tuesday, albeit the losses were not as severe as they were on Monday.
Shanghai, Wellington, and Taipei all had declines, but Tokyo, Sydney, Seoul, Manila, and Jakarta all saw gains.
The dismal tone in Asia contrasted sharply with Wall Street, where all three major indices finished at new highs, owing to better-than-expected corporate profits and a long-held view that the economy’s long-term prospects remain bright.
Despite an alarming increase in cases of the Delta variety, the US has made progress.
The focus now shifts to the Federal Reserve’s important board meeting, which will be widely watched for policy direction in light of the economic recovery and concerns about price inflation.
While the bank is expected to keep its accommodative posture for the time being, officials are expected to start talking about slowing its bond-buying program.
“Equity markets have oscillated between inflation and growth anxieties, which should not coexist,” Natixis Investment Managers Solutions’ Esty Dwek explained.
“Growth,” she added. Brief News from Washington Newsday.