Global Markets: Asia opens higher, but China tech worries weigh on Hong Kong

KANZHUN

06/07/2021 03:01

By Scott Murdoch
    HONG KONG, July 6 (Reuters) - Most Asian share markets
opened a fraction higher on Tuesday, ahead of a key decision by
Australia's central bank on its quantitative easing programme
and despite ongoing concerns over the future regulation of
China's powerful technology sector. 
    U.S. markets were closed on Monday to mark the Independence
Day holiday, leaving the Asian region without a strong lead to
start trading on Tuesday.
    MSCI's broadest index of Asia-Pacific shares outside Japan
 .MIAPJ0000PUS  was up 0.05%.  
    In Hong Kong, the Hang Seng Index  .HSI  was down 0.7% while
China's CSI300  .CSI300  was off by nearly 0.3%.
    Japan's Nikkei  .N225  was up 0.45% while the S&P ASX200
 .AXJO  stood 0.21% higher. In South Korea, the Kospi 200 Index
 .KS200  rose 0.5% in early trade.
    Chinese technology stocks remain under the microscope on
Tuesday after the Cyberspace Administration of China (CAC)
ordered an investigation into Didi Global Holdings  DIDI.N  just
days after it listed on the New York Stock Exchange.
 urn:newsml:reuters.com:*:nL2N2OH00S
    "There is still lingering uncertainty from China's tech
companies and they are prominent in the Asian market, so that
could be a cloud for market sentiment," said Tai Hui, JPMorgan
Assset Management chief Asia market strategist.
    "The tech sector is very significant in Asia and we are not
going to have a lot of clarity on the regulatory adjustments in
China for the next few weeks or even months and (that) will be
an important driver for the market."
    Investor appetite for Chinese tech companies could be tested
by Xiaomi Corp  1810.HK  mandating 12 banks on Tuesday to lead a
potential U.S. dollar debt issuance.  urn:newsml:reuters.com:*:nL2N2OI00N
    In Australia, the prospect of more mergers and acquisitions
activity is being scrutinised by investors after a $16.7 billion
bid for Sydney Airport Holdings Ltd  SYD.AX  from a pension fund
consortium emerged on Monday.  urn:newsml:reuters.com:*:nL2N2OG0KS
    "Sentiment appears to have almost moved past the (economic)
reopening trade and into outlook for corporate earnings that are
coming up in August," Karen Jorritsma, head of equities at RBC
Capital Markets in Sydney told Reuters. 
    "Generally (earnings) 'confession season' has been
remarkably good, and with balance sheets in such great shape the
tide is turning to potential for M&A."
    Globally, the publication of the U.S. Federal Reserve's
Federal Open Markets Committee minutes for June on Wednesday is
highly anticipated by investors for guidance on whether ongoing
emergency stimulus measures could start to be tapered.
    Major European markets were in positive territory overnight
despite a jump in the Brent crude  LCOc1  price to above $77 a
barrel, the highest level since October 2018.  urn:newsml:reuters.com:*:nL2N2OH0HA
    The spike came after OPEC+ ministers called of discussions
on Monday after clashing last week when the United Arab Emirates
rejected a proposed eight-month extension to output curbs,
meaning no deal to boost production has been agreed.
    There has been no date set for the next meeting of ministers
of OPEC+ countries - the Organization of the Petroleum Exporting
Countries (OPEC) and allied producers including Russia - but
sources told Reuters new discussions could begin in the next few
days.
    Elevated oil prices are adding to concerns that a higher
global inflation rate could derail the post-coronavirus pandemic
recovery under way in some major world economies.
    The Reserve Bank of Australia is expected to keep the
official cash rate target on hold at 0.1%, but has flagged it
will announce its decisions on the broader quantitative easing
programme which is set to end in September.
    Economists predict the RBA will limit its three-year bond
yield target of 0.1% to the April-2024 bond, rather than
extending it to the November-2024 bond.  urn:newsml:reuters.com:*:nL3N2OB1QH  
    

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 (Reporting by Scott Murdoch in Hong Kong; Editing by Kenneth
Maxwell)
 ((Scott.Murdoch@thomsonreuters.com;))
 
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