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Asia report: Most markets fall with tech stocks, Evergrande in focus

By Josh White

Date: Monday 06 Dec 2021

Asia report: Most markets fall with tech stocks, Evergrande in focus

(Sharecast News) - Equity markets were mostly lower at the close in Asia on Monday, with technology stocks and embattled property giant China Evergrande in focus as they tumbled in the Greater China region.
In Japan, the Nikkei 225 was down 0.36% at 27,927.37, as the yen weakened 0.36% against the dollar to last trade at JPY 113.21.

Technology conglomerate SoftBank Group plunged 8.2%, while among the benchmark's other major components, automation specialist Fanuc was up 0.91% and fashion firm Fast Retailing rose 1.74%.

The broader Topix index was 0.53% weaker by the end of trading in Tokyo, closing at 1,947,54.

On the mainland, the Shanghai Composite lost 0.5% to 3,589.31, and the smaller, technology-heavy Shenzhen Composite was 1.22% lower at 2,495.50.

South Korea's Kospi managed gains of 0.17% to 2,973.25, while the Hang Seng Index in Hong Kong dropped 1.76% to 23,349.38.

Technology plays were in focus in the special administrative region, with JD.com down 4.85% and Tencent 3.2% weaker.

E-commerce giant Alibaba pared earlier losses but still closed 5.61% weaker, after it announced its deputy financial chief Toby Xu would succeed chief financial officer Maggie Wu from 1 April.

A reshuffle to components of the various indices was also on the agenda in Hong Kong, with technology names JD.com and Netease joining the Hang Seng benchmark, as the index was expanded to 64 stocks from the previous 60.

Floundering property developer China Evergrande, meanwhile, was being removed from the China Enterprises Index, after it warned in a regulatory filing on Friday that repayment had been demanded on around $260m of debt.

"In the event that the group is unable to meet its guarantee obligations or certain other financial obligations, it may lead to creditors demanding acceleration of repayment," the company said.

Shares in China Evergrande Group sank in Hong Kong, closing 19.56% lower.

The blue-chip technology stocks were on the front foot in Seoul, meanwhile, with Samsung Electronics last up 0.93% and SK Hynix rising 0.42%.

"Asian shares were mixed with investors looking to another 20% plunge in the shares of Evergrande as it warned there was no guarantee it would be able to meet coupon payments," said Markets.com chief market analyst Neil Wilson.

"Alibaba shares fell 5% in Hong Kong as it announced a shake-up of its global e-commerce business and said its long-serving CFO was stepping down."

Looking stateside, Wilson said Friday's jobs report out of the US was a mixed bag, with a disappointing headline number but encouraging unemployment levels and wages not spiralling out of control.

"The reaction in the market was to buy Treasuries - the 10-year was back down to 1.38% this morning, but there is nothing to suggest the Fed is not going to increase the speed of its taper when it meets this month."

Oil prices were higher at the end of the Asian day, with Brent crude last up 2.58% at $71.68 per barrel, and West Texas Intermediate rising 2.81% to $68.12.

In Australia, the S&P/ASX 200 eked out gains of 0.05% to 7,245.10, while across the Tasman Sea, New Zealand's S&P/NZX 50 was 0.62% lower to end the day at 12,597.81.

The down under dollars were a mixed picture against the greenback, with the Aussie last 0.46% stronger at AUD 1.4224, while the Kiwi weakened 0.08% to NZD 1.4815.

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