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Asian Stocks Decline, Hong Kong Markets Bounce Back

Shares in Asia-Pacific were mostly lower on Wednesday, with stocks in Hong Kong seeing a partial bounce back from a two-day rout.

The Hang Seng index in Hong Kong closed 1.54% higher at 25,473.88. That followed a more than 8% decline two days earlier this week triggered by regulatory fears over sectors such as technology and private education.

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Hang Seng Index Performance Chart
Analysts at Bespoke Investment Group pointed out that there had only been one other period in 2011 when the Hang Seng declined more than 7.5% for two days. 

Chinese tech stocks in Hong Kong, among the hardest hit in the recent sell-off, rose on Wednesday.

The shares of internet giant Tencent in Hong Kong gained 0.27% while Alibaba rose 1.83% and Meituan surged 7.53%. The Hang Seng Tech index advanced 3.1% to 6,443.31.

Electric vehicle maker Xpeng’s Hong Kong-listed shares plummeted 7.94%, mirroring losses seen for its U.S.-listed stock overnight.

Stocks of firms in the private education space, another sector hit by regulatory scrutiny, bounced back after heavy losses earlier in the week: New Oriental Education & Technology Group gained 9.71% while Koolearn Technology jumped 9.16%.

Mainland Chinese stocks closed lower. The Shanghai Composite fell 0.58% to 3,361.59 while the Shenzhen component declined fractionally to 14,086.42.

South Korea’s Kospi closed 0.13% higher at 3,236.86. The S&P/ASX 200 in Australia dipped 0.7% on the day to 7,379.30. Australia’s consumer price index rose 0.8% in the June 2021 quarter, according to data released Wednesday by the country’s Bureau of Statistics.

In Japan, the Nikkei 225 dropped 1.39% to close at 27,581.66 while the Topix index slipped 0.95% to finish the trading day at 1,919.65.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.26%.

The Covid situation regionally may also have weighed on investor sentiment, with movement restrictions across Australia’s Greater Sydney area extended for four weeks on Wednesday.

Elsewhere, South Korea on Wednesday reported its highest-ever daily increase in Covid infections, according to Reuters.

Mitsubishi Motors’ stock in Japan surged 8.42% on Wednesday after the automaker upgraded its operating profit forecast by 33.3% for the fiscal year ending March 31, 2022.

Shares of Apple supplier stocks in Asia-Pacific were also watched by investors after the tech giant warned that chip supply constraints could impact iPhones and iPads this quarter.

In Wednesday trade, shares of Murata Manufacturing in Japan fell 0.63% while South Korea’s LG Display edged 1.78% higher.

Over in Taiwan, shares of Hon Hai Precision Industry dropped 0.9% while Taiwan Semiconductor Manufacturing Company’s stock slipped 0.17%.

Asian Markets Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.554 following a recent drop from above 92.7.

The Japanese yen traded at 109.95 per dollar, stronger than levels above 110.4 seen against the greenback earlier this week. The Australian dollar changed hands at $0.7343, above levels below $0.732 seen last week.

Oil prices were higher in the afternoon of Asia trading hours, with international benchmark Brent crude futures up 0.42% to $74.79 per barrel. U.S. crude futures gained 0.52% to $72.02 per barrel.

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