SINGAPORE. Chinese stocks underperformed in the Asia-Pacific region on Tuesday, although some losses were offset by the release of Chinese economic data that far exceeded expectations.
Hong Kong’s Hang Seng Index suffered regional losses on Tuesday, momentarily falling more than 4% before bouncing back from some of those losses, down 2.26% in recent trading. This comes after the benchmark index closed at its lowest level since March 2016 on Monday.
Shares of Chinese tech companies in Hong Kong largely continued to decline in trading on Tuesday, with the Hang Seng Tech index slipping more than 1% after falling nearly 6% earlier.
Hong Kong-listed shares of Alibaba, JD.com and NetEase – firms that are also listed in the US – fell more than 2% each as investors continued to assess the prospects of a potential delisting from US exchanges.
Shares in electric vehicle maker Nio, another dual-listed company, fell more than 10% after its U.S. shares plummeted overnight on renewed delisting concerns.
Sentiment for Chinese tech stocks plummeted on Monday following a Wall Street Journal report that Tencent could be fined for violating anti-money laundering rules.
“The prospect of a huge record fine for Tencent for violating money laundering regulations has raised concerns that Beijing’s opaque crackdown on the tech space may not be everything in the rearview mirror,” Mizuho Bank’s Vishnu Varatan wrote in a note on Tuesday. .
In mainland China, the Shanghai composite index fell 1.5% and the Shenzhen composite index shed 0.657%.
Data released on Tuesday showed China’s industrial output rose 7.5% year-on-year in January and February from a year earlier, higher than the 3.9% growth forecast by analysts in a Reuters survey.
Retail sales in China in the first two months of the year also beat expectations, rising 6.7% in January and February, compared to analysts’ expectations of 3% growth in the Reuters survey.
However, China is currently experiencing the worst Covid-19 outbreak since the peak of the pandemic in 2020, and major cities, including Shenzhen, are rushing to limit business activity.
Elsewhere, the South Korean Kospi shed 0.67%. In Australia, the S&P/ASX 200 fell 0.53%.
Japan’s Nikkei 225 added 0.37% and the Topix added 0.93%.
The broadest Asia-Pacific MSCI stock index outside of Japan was down 1.26%.
Oil prices fell by 5%
Oil prices tumbled in Asian morning trading on Tuesday, with Brent oil futures falling 5.52% to $101 a barrel. U.S. oil futures fell 5.21% to $97.64 a barrel. The moves came after oil prices plummeted the day before.
Oil prices soared after Russia’s invasion of Ukraine, raising fears of supply disruptions in an already tight market. Talks between Ukrainian and Russian officials are due to resume on Tuesday after talks between the two sides on Monday.
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Overnight in the US, the S&P 500 fell 0.74% to 4,173.11 while the high-tech Nasdaq Composite fell 2.04% to 12,581.22. The Dow Jones industrial index remained practically unchanged and amounted to 32,945.24 points.
US Treasury yields rose on Tuesday morning Asian time. The benchmark 10-year Treasury yield rose to 2.1579% after hitting 2.14% on Monday. Yields vary inversely with prices. The rise in Treasury yields comes amid expectations that the US Federal Reserve will announce an interest rate hike on Wednesday.
Currencies
The US Dollar Index, which tracks the dollar against a basket of its peers, was at 99.136, still above the sub-98 levels seen last week.
The Japanese yen traded at 118.31 per dollar after falling below 118 against the US dollar yesterday. The Australian dollar traded at $0.7171 after falling from above $0.728 yesterday.