Asian shares fell on Friday, extending their biggest monthly drop since the height of global COVID-19 lockdowns in March last year due to lingering investor concern over regulatory crackdowns in China on the education, property and tech sectors.
Losses grew even after reassurances from Chinese regulators and official media helped to soothe investors’ nerves a day earlier, and following indications from the US Federal Reserve that its bond-buying program would remain unchanged for now.
A continuing outbreak of the Delta variant of SARS-CoV-2 in China’s Jiangsu Province also weighed on the mood on Friday.
“It’s clear investors are very rattled by the regulatory crackdown,” said Michael Frazis, portfolio manager at Frazis Capital Partners in Sydney, adding that the market continues to face other near-term pressure.
“You will have talk about tapering, and you do have a lot of coronavirus beneficiaries which are largely in the tech sector. [Earnings] growth will be slow, and they will be reporting numbers off of very high bases for this time last year... We expect tech indices to be challenged in the near term, but we’re very optimistic over the medium and long term.”
On Friday, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.33 percent, taking its losses for the month to more than 7 percent.
In Taipei, the TAIEX ended down 155.40 points, or 0.89 percent, at 17,247.41, after moving between 17,237.67 and 17,429.01. Turnover totaled NT$535.965 billion (US$19.16 billion). The index dropped 1.85 percent from a week earlier.
Japan’s Nikkei 225 dipped 1.8 percent to 27,283.59, its 11th straight month of declines on the last trading day in the month. For the week, it lost 0.96 percent. The broader TOPIX dropped 1.37 percent to 1,901.08, posting a weekly decline of 0.17 percent.
The Shanghai Composite Index dropped 0.42 percent to 3,397.36, diving 4.31 percent from a week earlier.
Hong Kong’s Hang Seng Index fell 1.35 percent to 25,961.03, losing 4.98 percent on the week.
South Korea’s KOSPI declined 1.24 percent to 3,202.32, posting a weekly drop of 1.6 percent, while Australia’s S&P/ASX 200 lost 0.33 percent to 7,392.6, dipping 0.02 percent from a week earlier.
The declines in Asia came despite robust US earnings and forecasts, as well as strong second-quarter economic growth figures, that helped to lift Wall Street to record intraday highs on Thursday.
In the second quarter, the US economy grew past levels seen before the COVID-1`9 pandemic, helped by rising vaccination numbers and government aid, although the expansion fell short of expectations and rising infections are clouding the outlook for the third quarter.
Additional reporting by staff writer, with CNA
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