Asian Stocks Down, Focus on China Tech Crackdown and U.S.-China Talks By Investing.com



© Reuters.

By Gina Lee

Investing.com – Asia Pacific stocks were mostly down on Monday morning as a technology-sector crackdown in China and the upcoming , lingered on investors’ minds.

Japan’s jumped 1.39% by 10:29 PM ET (2:29 AM GMT), with markets reopening after a holiday and the released earlier in the day.

South Korea’s was down 0.30% and in Australia, the edged up 0.13%.

Hong Kong’s slid 2.13%, with the Hang Seng Tech Index, which offers exposure to China’s internet giants, currently the worst-performing major tech gauge globally.

China’s fell 1.32% and the fell 1.42%, with China , one of country’s hottest investment plays in recent years, over the weekend.

Tensions with the U.S. were also high as U.S. Deputy Secretary of State Wendy Sherman and Chinese Foreign Minister Wang Yi hold their first high-level U.S.-China talks since March 2021. As the talks began earlier in the day, Chinese foreign vice-minister Xie Feng told Sherman that relations between the two countries had reached a “stalemate” and faced “serious consequences”, the Chinese foreign ministry said in a statement.

U.S. shares steadied after closing at record levels on Friday, boosted by a U.S. earnings season that has beaten expectations. Tesla Inc. (NASDAQ:), Alphabet Inc. (NASDAQ:), Apple Inc. (NASDAQ:), Facebook Inc . (NASDAQ:) and Amazon.com Inc. (NASDAQ:) are among the heavyweights who will report earnings throughout the week. U.S. Treasuries remained little changed.

Investors are now bracing for possible turbulence ahead of the Fed’s latest policy decision, due to be handed down on Wednesday. The central bank is widely expected to say that it will start scaling back its asset purchases, including $120 billion in monthly bond purchases, in 2022 and hike interest rates at a quicker-than-expected rate through 2024.

However, some investors believed that the Fed would maintain its current dovish stance whilst starting a countdown towards asset tapering.

“The main message from Fed Chairman Jerome Powell’s post-meeting press conference should be consistent with his testimony before Congress in mid-July when he signaled no rush for tapering,” said NatWest Markets economist Kevin Cummins (NYSE:).

“However, he will clearly remind market participants that the taper countdown has officially begun,” he added.

Investors remained cautiously optimistic as the week opened and as they look ahead to U.S. second-quarter data due on Thursday.

“The macro narrative remains one of a post-COVID-19 recovery,” AXA Investment Managers chief investment officer for core investments Chris Iggo said in a note.

However, lingering concerns about the ongoing spread of COVID-19 globally mean bouts of market volatility will remain. “Continued pandemic risk is likely to be a recurring source of ‘risk-off’ events in the financial markets,” said Iggo’s note.

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