(Bloomberg) — Asian stocks fell Monday as Beijing’s widening technology-sector crackdown hurt Hong Kong and Chinese equities, overshadowing a rally in U.S. shares to an all-time high last week on robust corporate earnings.
A Hong Kong gauge of tech firms tumbled more than 6% and the city’s main market slid. Chinese equities are set for the worst retreat in a year. Beijing’s latest moves include reform of China’s $100 billion education tech industry and a vow to “improve order” in the property market, steps that roiled a slew of firms and stirred questions about what regulators may do next.
Japanese shares bucked the sour mood, rising after a two-day holiday. U.S. equity contracts slipped following a record Wall Street close Friday, with the S&P 500 almost doubling from the depths of the pandemic. About 87% of the S&P 500 firms reporting results so far this season have beaten estimates.
Treasuries pushed higher, and traders are braced for possible turbulence from a Fed meeting this week where officials are due to discuss when and how to taper stimulus. Treasury market volatility has jumped on economic risks from the spread of the delta variant of Covid-19. The Japanese yen outperformed in the Group-of-10 currencies amid a mood of caution.
Investors have taken heart from a spectacular U.S. earnings season but concerns about inflation, the delta strain and China’s tech broadside linger. The outlook for the Fed’s $120 billion in monthly bond purchases also remains key: economists surveyed by Bloomberg expect the central bank to start scaling back asset purchases next year and to raise interest rates at a quicker pace through 2024 than previously thought.
Read more: Whipsawed Bond Traders Hunker Down for the Return of the Fed
“The second half of the year is going to be this glass half-full, half-empty context” spanning monetary and fiscal support and good earnings but also concern about the virus, Virginie Maisonneuve, Allianz Global Investors global chief investment officer for equity, said on Bloomberg Television.
U.S.-China tension is on the radar too. China lashed out at U.S. policies in a tense start to high-level talks in Tianjin, declaring the relationship between the world’s two largest economies in a “stalemate.”
Elsewhere, Bitcoin jumped toward $40,000, continuing a recent rally. Crude oil declined below $72 a barrel.
Here are some key events to watch this week:
Tesla, Alphabet, Apple, Facebook, Amazon report earnings this weekFederal Reserve policy meeting concludes WednesdayU.S. GDP data are due Thursday
These are some of the main moves in markets:
Stocks
S&P 500 futures slipped 0.3% as of 7:15 a.m. in London. The S&P 500 rose 1%Nasdaq 100 futures shed 0.1%. The Nasdaq 100 climbed 1.2%Japan’s Topix index added 1.1%Australia’s S&P/ASX 200 index was little changedSouth Korea’s Kospi index fell 0.8%Hong Kong’s Hang Seng index slid 3.6%China’s Shanghai Composite index dropped 2.6%Euro Stoxx 50 futures declined 0.5%
Currencies
The Japanese yen was at 110.30 per dollar, up 0.2%The offshore yuan was at 6.4890 per dollar, down 0.2%The Bloomberg Dollar Spot Index was little changedThe euro was at $1.1780, rising 0.1%
Bonds
The yield on 10-year Treasuries dipped about three basis points to 1.25%Australia’s 10-year bond yield fell one basis point to 1.18%
Commodities
West Texas Intermediate crude shed 1.1% to $71.27 a barrelGold was at $1,807.69 an ounce, up 0.3%
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