GLOBAL MARKETS – China’s nervousness pulls Asian stocks to seven-month low

HONG KONG, July 27 (Reuters) – Asian stock markets fell to new lows on Tuesday, led by a third straight session of massive selling at Chinese internet giants, as bond and currency markets traded at the hike ahead of the Federal Reserve’s policy meeting.

The largest MSCI index for Asia-Pacific stocks outside of Japan fell 0.25% to its lowest level since mid-December, extending a low reached the previous day.

The Hong Kong benchmark fell 0.59%, its third day of decline, with the Hang Seng Tech index down 2% to its lowest since its inception in July 2020. It is down by ‘about 11% in three days and lost 40% compared to a month of February. Peak.

The big declines included Meituan and Alibaba, whose shares fell 8.15 and 3.38% respectively. Both were down for the third day in a row, with investors expecting corporate food delivery services to be affected by new regulations guaranteeing workers more than the minimum wage.

In onshore markets, Chinese bluechips fell 0.26% after closing Monday at their lowest since December thanks to regulatory crackdowns in education and real estate. “The market seems uncertain whether there will be more policy changes for fintech, social media platforms, delivery platforms and ridesharing platforms,” said Iris Pang, chief economist for Greater China at ING .

“Everyone has their own problem and faces different regulatory measures, so the market is looking ‘which tech sub-sector will be next? “”

Elsewhere in Asia, markets were a bit more bullish, with the Japanese Nikkei up 0.35% and Australian stocks up 0.54%. S&P 500 futures were down 0.1% and Euro STOXX 50 futures were broadly stable.

US corporate earnings and the Federal Reserve’s monetary policy meeting were also on the minds of investors.

“It’s profits and the Fed. The next few days are going to be monumental as everyone tries to figure out how strong corporate fundamentals are right now and the backdrop for that in terms of the economic outlook and political parameters, ”said Kyle Rodda, analyst market at IG. Markets.

Alphabet Inc, Apple Inc and Microsoft Corp are expected to release their quarterly results late Tuesday, with Amazon.com Inc due for release later in the week.

Additionally, the Federal Reserve will begin its two-day meeting later on Tuesday, with investors due to consider a statement and press conference by Fed Chairman Jerome Powell expected Wednesday evening.

They will look to see how the central bank balances rapidly rising prices with the complication of rising coronavirus infections.

The three major US stock indexes hit record closing highs for a second straight session on Monday, but S&P 500 futures fell 0.14%.

The imminent Fed meeting has put the brakes on major moves in other asset classes.

The dollar has hovered a little below recent highs, with the euro and British pound gaining ground, the latter being helped by a drop in new daily COVID-19 cases in the UK.

US Treasury yields rose in early Asian trading on Tuesday, after a choppy Monday.

The benchmark 10-year Treasury yield was 1.2812% from its US close of 1.276%, while the two-year yield rose to 0.2134% from a US close of 0.196%.

Gold was slightly higher, with spot gold trading at $ 1,797.28 an ounce, while US crude rose 0.43% to $ 72.22 a barrel.

Bitcoin fell below $ 37,000 from a peak of $ 40,581 on Monday after Amazon.com offered a qualified denial of a weekend report saying it was preparing to accept crypto. currencies.