Asian stocks slide as delta spread scares investors

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HONG KONG, Aug. 3 (Reuters) – Asian stocks were mostly negative on Tuesday as the Delta coronavirus variant spread to key markets and Chinese officials targeted video game producers, once shaking higher investor confidence in mainland markets.

In Asia, the largest MSCI Asia-Pacific stock index outside of Japan (.MIAPJ0000PUS) held steady during the afternoon session after opening in negative territory.

The Japanese Nikkei (.N225) was down 0.52% later on Tuesday.

China’s blue-chip CSI300 index (.CSI300) opened lower 0.80% but gained ground to retreat 0.1%. Hong Kong’s Hang Seng Index (.HSI) fell 0.33% during the afternoon.

The Korean, Thai and Indian markets were up, pushing the MSCI index higher.

“Market volatility will continue,” Suresh Tantia, senior investment strategist at Credit Suisse.

“Equities are slightly expensive and markets are looking for the next positive catalyst. Growth has peaked and macroeconomic momentum is moderating. I wouldn’t be surprised to see more pullback in equities if this weakness persists.”

Chinese tech giant Tencent Holdings Ltd (0700.HK) was on course to fall the most in a decade, while rival Netease Inc (9999.HK) lost nearly 16% after Chinese state media called for restrictions on the online gaming industry. Read more

Australia’s benchmark S & P / ASX200 (.AXJO) was down 0.38%, after hitting a record high on Monday after Square Inc (SQ.N) announced a $ 29 billion offer for the company Buy It Now Afterpay Ltd (APT.AX).

The Reserve Bank of Australia lived up to expectations and kept the official treasury rate at an all-time high of 0.1%.

The central bank also upheld the July bond degression decision despite some expectations that it could change due to the lockdowns in Sydney and Brisbane.

In China, the spread of the Delta variant from the coast to inland cities has prompted authorities to implement strict measures to bring the outbreak under control. Read more

“Millions of people have been stranded in China following the worst outbreak since the start of the COVID crisis and given the risks to supply chains this could have a bigger effect on the global economy.” said Elizabeth Tian, ​​director of equity derivatives solutions at Citigroup.

Adding to this negative sentiment is continued investor concern over increased Chinese official regulation in sectors such as tech, fintech and education.

“It is a difficult time for Asian equities with the uncertainty created by regulatory measures,” said Zhikai Chen, head of Asian equities at BNP Paribas Asset Management.

“The China Securities Regulatory Commission (CSRC) took the lead last week to limit the spread of contagion and counter popular thinking that the industry is next. It worked for a few days, but then we saw the flows start to reverse again.

“From a global investor perspective … there is a short-term recalibration of risk appetite.”

Despite struggles in China’s tech sector, electric vehicle maker Li Auto launched its main dual listing in Hong Kong on Tuesday, which will raise up to $ 1.9 billion, according to its exchange documents. Read more

The Dow Jones Industrial Average (.DJI) fell 0.28% on Monday, the S&P 500 (.SPX) lost 0.18% and the Nasdaq Composite (.IXIC) gained 0.06%.

The benchmark 10-year Treasury yield fell 5.5 basis points to 1.1839% in afternoon trading, continuing a downtrend since spring.

The yield hit 1.151%, the lowest since July 20, shortly after an Institute for Supply Management report showed U.S. manufacturing growth in July slowed for the second month. consecutive.

Oil weakened Tuesday night after initially gaining in the Asian time zone after falling 3.3% to 3.6% in the United States on Monday. Analysts said the drop was the result of investors questioning whether the Delta variant would hurt global economic growth.

US crude remained stable at $ 71.26 per barrel. Brent crude was also flat at $ 72.9 per barrel. Gold was slightly lower.

Spot gold was trading down 0.16% to $ 1,810.45 an ounce.

Reporting by Scott Murdoch in Hong Kong; Editing by Sam Holmes

Our standards: Thomson Reuters Trust Principles.

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