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LOW Source:
Pakistan Deaths
Pakistan Cases
0.89% positivity

Asian markets hit by recovery worries as tech drags Hong Kong

  • After enjoying a broadly healthy run-up at the start of September, markets were again on the back foot as traders reassess their growth outlook for this year in light of the fast-spreading Delta variant
09 Sep 2021

HONG KONG: Asian equities retreated Thursday on growing concerns about the impact of the Delta coronavirus variant, while Hong Kong's tech giants led a sharp sell-off after China further tightened its grip on the gaming sector.

After enjoying a broadly healthy run-up at the start of September, markets were again on the back foot as traders reassess their growth outlook for this year in light of the fast-spreading Delta variant.

Wall Street's three main indexes finished well in the red after the Federal Reserve's closely watched Beige Book on the state of the US economy pointed to a slowdown caused by Covid-19 as well as problems with supply and a lack of workers.

It said growth had "downshifted" in July and August, which was "largely attributable to a pullback in dining out, travel, and tourism in most districts, reflecting safety concerns due to the rise of the Delta variant".

"Looking ahead, businesses in most districts remained optimistic about near-term prospects, though there continued to be widespread concern about ongoing supply disruptions and resource shortages," it added.

Analysts pointed out that while Covid remained a major headwind, the issue of supplies and cost pressures was noticeably prominent in the report.

"Momentum definitely seems to be slowing as far as the recovery is concerned," said Fiona Cincotta, at City Index.

"Before we'd been hearing that the Fed would tighten monetary policy and that's what was unnerving the market. Now, it's actually slightly softer data and also rising Covid cases."

Tokyo ended the morning down with profit-taking playing a part after the Nikkei rose around five percent over the previous four days, while Shanghai, Sydney, Seoul, Wellington and Manila also fell.

But the standout was Hong Kong, which sank more than one percent, dragged by tech giants after Beijing again cracked the whip.

Chinese authorities summoned gaming companies to demand they not focus on profits and "resist unfair competition to prevent excessive market concentration or even monopolies in the industry".

The state-run Xinhua agency reported that officials also called for the companies -- which included Tencent and NetEase -- to remove "obscene and violent content" and avoid "unhealthy tendencies, such as money-worship and effeminacy".

The move comes after authorities last week unveiled rules limiting the amount of time children could spend playing video games.

The latest announcement hammered industry giants, with Tencent, Alibaba and sinking more than three percent while NetEase tumbled more than six percent.

Investors had been cautiously edging back into the industry in recent sessions on hopes that the crackdown by China on a range of private enterprises may be easing off.

There was little major reaction to news that China's producer price index, a gauge of the cost of goods at the factory gate, rose to a 13-year high, while consumer prices came in below forecasts.

Key figures around 0230 GMT

Tokyo - Nikkei 225: DOWN 0.5 percent at 30,041.33 (break)

Hong Kong - Hang Seng Index: DOWN 1.1 percent at 26,044.23

Shanghai - Composite: DOWN 0.1 percent at 3,673.20

Dollar/yen: DOWN at 110.13 yen from 110.24 yen at 2040 GMT

Euro/dollar: UP at $1.1824 from $1.1815

Euro/pound: DOWN at 85.87 pence from 85.77 pence

West Texas Intermediate: UP 0.2 percent at $69.43 per barrel

Brent North Sea crude: UP 0.3 percent at $72.79 per barrel

New York - Dow: DOWN 0.2 percent at 35,031.07 (close)

London - FTSE 100: DOWN 0.8 percent at 7,095.53 (close)

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