Jakarta, CNBC Indonesia – Majority of exchanges Asia closed lower again on Tuesday (27/7/2021), where the Hong Kong and Chinese stock markets continued to sink in today’s trading, as the market was worried about China’s technology sector regulations and the private education sector.
Hong Kong’s Hang Seng index and China’s Shanghai Composite again led the decline in Asian markets today. Hang Seng again closed down 4.22% to 25,086.43 and Shanghai also fell 2.49% to 3,381.18.
Meanwhile, the majority of other Asian stock markets also closed lower. Singapore’s Straits Times Index closed down 0.01% to 3,138.81 and the Jakarta Composite Index (JCI) fell 0.15% to 6,097.05.
Only Japan’s Nikkei and South Korea’s KOSPI closed in the green in today’s trading. The Nikkei closed up 0.49% at 27,970.22 and the KOSPI ended up 0.24% at 3,232.53.
The Hang Seng and Shanghai indexes closed down again as investors responded negatively to regulations in the technology sector and private education sector in China.
Hong Kong-listed Chinese tech giant Tencent plunged 8.98%, while Alibaba tumbled 6.35% and Meituan tumbled 17.66%. This sent the Hang Seng tech index slipping 7.97% on the day.
Geopolitical concerns are also still weighing on investor sentiment in Asia today, after a high-level meeting between US and Chinese officials ended with criticism on both sides.
“Fundamentally, the reason is that some Americans portray China as an enemy in their minds,” Chinese Foreign Minister Xie Feng was quoted as saying by the Xinhua news agency.
So far, China has retaliated by tightening the rules for digital companies listed on Western exchanges.
On Friday (23/7/2021) last weekend, Beijing banned foreign investment in the education sector, and tightened regulations on technology and property companies.
Meanwhile, China’s antitrust regulator on Monday announced a set of guidelines for… platform food deliveries that include paying delivery people at least the local minimum wage, a move that could hurt the profits of companies like Meituan and Alibaba.
In the education sector, Louis Tse, managing director of Wealthy Securities in Hong Kong, said curbs on education were needed to prevent “chaos” in the lucrative sector.
“The Chinese government … in the right way, they want to put pressure on and try to regulate the industry to be more acceptable, but of course investors … I wouldn’t say they suffer. They won’t make that much anymore.” Tse said, quoted from Reuters Monday (26/7/2021).
If the political dynamics of the two countries deteriorate, then the fear of a trade war has the opportunity to re-emerge.
CNBC INDONESIA RESEARCH TEAM
(chd / chd)
– .
