HONG KONG (AP) — Asian stocks were mostly lower on Monday, with Chinese shares again leading the declines even after the market regulator in Beijing pledged to crack down on abuses and protect small investors.
The main index in the smaller market in Shenzhen sank 5.4 per cent but then rapidly recovered to trade 1.7 per cent lower. The Shanghai Composite index slipped more than 2 per cent before recovering some lost ground.
US futures declined and oil prices were higher.
On Sunday, the China Securities Regulatory Commission said it would redouble enforcement of measures against crimes such as market manipulation and malicious short selling, while guiding more medium and long-term funds into the market.
The move followed others in recent days that appear to have done little to reassure investors who have been pulling money out of the markets for months. Last week, Chinese stocks capped their worst week in five years.
Comments by former President Donald Trump said he might impose a tariff of more than 60 per cent on imports of Chinese goods if he is re-elected also hurt market sentiment. In another blow, a report said China’s services sector grew at a slightly slower rate in January, with the purchasing managers’ index falling to 52.7 from 52.9 in December, according to a private-sector survey Monday. A PMI above 50 indicates expansion when compared to the previous month.
By mid-afternoon Monday, the Shanghai Composite index was down 0.2 per cent at 2,725.54. Hong Kong’s Hang Seng gained 0.6 per cent to 15,630.63.
Elsewhere in Asia, Tokyo’s Nikkei 225 index climbed 0.6 per cent to 36,390.31.
Australia’s S&P/ASX 200 sank 1 per cent to 7,623.30. South Korea’s Kospi shed 0.6 per cent to 2,599.62.
On Friday, Big Tech stocks once again carried Wall Street to a record, even though the majority of stocks fell due to renewed worries about risks of a hot economy.
Big gains for Meta Platforms and Amazon helped drive the S&P 500 index up by 1.1 per cent and closed at 4,958.61. It’s in a torrid run where it’s climbed in 13 of the last 14 weeks. The Big Tech stocks, which are two of Wall Street’s most influential, also vaulted the Nasdaq composite up by 1.7 per cent.
But the Dow Jones Industrial Average, which has less of an emphasis on tech, rose by a more modest 0.3 per cent to 38.654.42. And the Nasdaq jumped 1.7 per cent to 15,628.95.
Stocks felt pressure from much higher yields in the bond market after a report showed US employers hired many more workers last month than economists expected.
That’s great for workers and helps keep the risk of a recession at bay, but it could preserve some upward pressure on inflation and lead the Federal Reserve to wait longer before it begins cutting interest rates.
Hopes for such cuts, which can relax the pressure on the economy and goose investment prices, have been a major reason the US stock market has surged to record heights. Fed Chair Jerome Powell said earlier this week that it’s unlikely cuts will begin as soon as traders had been hoping.
The jobs report landed on Wall Street amid a maelstrom of profit reports.
Meta Platforms, the owner of Facebook and Instagram, soared 20.3 per cent after it reported stronger profit for the latest quarter than expected and said it would start paying a dividend to its investors.
Amazon rallied 7.9 per cent after it reported stronger profit and revenue for the latest quarter than expected.
They’re both members of a small group of Big Tech stocks known as the “Magnificent Seven” responsible for the majority of Wall Street’s run to a record. Their huge gains have set expectations very high for their growth, which they need to meet to justify the big runs for their stock prices.
Apple, another member of the Magnificent Seven, slipped 0.5 per cent even though it reported better profit than expected.
Charter Communications slumped 16.5 per cent for the sharpest loss in the S&P 500 after it reported weaker profit for the latest quarter than expected.
In other trading, benchmark US crude rose 39 cents to USD72.67 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 52 cents to USD77.85 a barrel.
The dollar fell to JPY148.38 from JPY148.43. The euro cost USD1.0779, down from USD1.0784.
