Asian markets mixed after tech sell-off on Wall Street

BANGKOK (AP) — Shares were mixed in Asia yesterday, as Chinese benchmarks stalled on concerns over big companies that might lose their listings on United States (US) exchanges.

Tokyo’s Nikkei 225 index jumped 1.1 per cent and Seoul and Sydney logged modest gains. Hong Kong and Shanghai were flat.

Oil prices fell back after surging six per cent on Wednesday on concerns over disruptions to shipping from a skyscraper-sized cargo ship wedged across Egypt’s Suez Canal.

Efforts continue to free the Ever Given, a Panama-flagged ship that carries cargo between Asia and Europe that ran aground on Tuesday in the narrow, man-made canal dividing continental Africa from the Sinai Peninsula.

The US Securities and Exchange Commission (SEC) said on Wednesday it was adopting an interim rule that some foreign companies must provide documentation to show they are not owned or controlled by a government entity. The requirement mainly is expected to affect Chinese companies listed on US exchanges and the SEC statement triggered selling of such companies in Hong Kong.

E-commerce giant Alibaba’s shares lost 3.7 per cent; Tencent Holdings’ shed 3.7 per cent; search engine company Baidu declined 8.6 per cent and cell phone maker Xiaomi dropped 4.8 per cent.

A currency trader passes by screens at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea. PHOTO: AP

“Tech giants from Tencent and Alibaba hit the plunge pool after US regulators rekindled threats to toss China’s most prominent corporations off US bourses, compounding concerns of a widening domestic antitrust crackdown,” Stephen Innes of Axi said in a commentary.

Investors are keeping an eye on efforts to combat the economic impact of the coronavirus pandemic.

The Biden administration is considering up to USD3 trillion in additional spending on infrastructure, green energy, and education.

Treasury Secretary Janet Yellen told the Senate she believes the US government has more room to borrow, but said higher taxes would likely be required in the long run to finance future spending increases. That spooked some investors.

Meanwhile, Federal Reserve Chair Jerome Powell reiterated that a recent jump in the yield on the 10-year US Treasury, which soared from less than one per cent at the beginning of the year to 1.63 per cent yesterday, was mostly a sign of confidence among investors that the economy is improving.

The Nikkei climbed to 28,729.88 and the Hang Seng in Hong Kong was flat at 27,919.59. The Shanghai Composite index also was flat, at 3,366.54. South Korea’s Kospi picked up 0.4 per cent to 3,008.33 and Sydney’s S&P/ASX 200 edged 0.2 per cent higher, to 6,790.60.

India’s Sensex lost 1.8 per cent and shares were higher in Taiwan and most of Southeast Asia apart from Jakarta.

On Wednesday, the S&P 500 gave up 0.5 per cent to 3,889.14, its second loss in a row, while the tech-heavy Nasdaq dropped two per cent to 12,961.89.

Technology and communication services companies accounted for the heaviest selling, outweighing gains in financial, energy and industrial stocks. Apple fell two per cent, while Facebook lost 2.9 per cent.

The Dow Jones Industrial Average slipped less than 0.1 per cent to 32,420.06, after a 364-point gain vanished by late afternoon.

Smaller company stocks fared worse than the broader market. The Russell 2000 index lost 2.4 per cent to 2,134.27.