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Asia Pacific Stocks Vary

05 August 2021

Asia Pacific Stocks Vary

Stocks in the Asia-Pacific region were mixed on Thursday. Investors also followed Hong Kong-listed shares of companies linked to China's video game sector after China's state media once again lashed out at the industry.

 

By the close of the market in Hong Kong on Thursday, Tencent shares in the city fell 3.9% and Netease 3.76%. The Hang Seng Tech Index was down 2.1% at 6,715.33.

 

The Securities Times, the publication of the Official Newspaper of the Chinese Communist Party People's Daily, published an article on Thursday arguing that gaming companies should not benefit from the preferential tax measures that were introduced to stimulate the development of the domestic software sector, since the gaming industry is now more developed.

 

The article states that the gaming industry should enjoy the same tax policies as other industries, and warns that the industry should be "morally prepared for this."

 

Shares of Tencent and Netease plummeted earlier this week after Chinese state media branded online games "opium" in an article that was deleted hours after publication and later reprinted with a new headline and removal of the word's mention.

 

Hong Kong's broader Hang Seng Index closed 0.84% lower at 26,204.69.

 

Mainland China's Shanghai composite fell 0.31% to close at 3,466.55, while the Shenzhen component fell 0.786% for the day to about 14,872.23.

 

Japan's Nikkei 225 added 0.52% to close at 27,728.12, while the Topix index rose 0.39% to end the trading day at 1928.98. South Korea's Kospi closed 0.13% lower to 3,276.13.

 

In Australia, the S&P/ASX 200 rose 0.11% to close at 7,511.10. According to data released by the country's Bureau of Statistics on Thursday, in July, Australia recorded a trade surplus of about 10.5 billion Australian dollars (about 7.75 billion dollars). According to a Reuters poll, this was above the forecasts of a trade surplus of 10.45 billion Australian dollars.

 

Asia Pacific's broadest stock index outside Japan fell 0.3%.

 

The Covid situation in China may have weighed on investor sentiment in the region. Daily infections in the country have risen again as the delta variant has spread across China and authorities have imposed mass testing and widespread travel restrictions in some areas.

 

At the same time, South Korea's Yonhap News Agency reported thursday that the toughest restrictions in the Seoul area are "likely to be extended again" as the number of cases remains high.

 

Overnight in the United States, the Dow fell 323.73 points to 34,792.67 and the S&P 500 fell 0.46% to 4,402.66. The Nasdaq Composite index showed the best dynamics, rising by 0.13% to 14,780.53.

 

The movements on Wall Street came after employment data from payroll company ADP came well below expectations. An ADP survey of private wages showed an increase of 330,000 jobs for July, well below the consensus forecast of 653,000. Closer attention to the release of the Ministry of Labor on employment in the non-agricultural sector will be focused on Friday.

 

The U.S. dollar index, which tracks the dollar against a basket of its counterparts, was 92.203 after a recent jump from below 92.

 

The Japanese yen was trading at 109.58 per dollar after declining yesterday from levels below 109 per dollar. The Australian dollar has passed hands at $0.74, still above levels below $0.735 seen earlier in the trading week.

 

Oil prices were lower in the afternoon trading in Asia, and the international benchmark futures for Brent crude oil fell 0.13% to $ 70.29 per barrel. U.S. crude futures fell 0.12% to $68.07 a barrel.

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