Equities in Asia-Pacific are mixed, with Chinese online gaming stocks coming under further pressure

On Thursday, Asia-Pacific stocks were neutral. After China’s state media took another swipe at the industry, investors kept an eye on Hong Kong-listed shares of companies involved in the Chinese video gaming business. Tencent’s stock had lost 3.9 percent in Hong Kong by Thursday’s market closing, while Netease’s stock had dropped 3.76 percent. The Hang Seng Technology index fell 2.1% to 6,715.33.

On Thursday, the Securities Times, a publication under the Chinese Communist Party’s official newspaper People’s Daily, published an article arguing that, because the gaming industry is more developed now, preferential tax measures were introduced to encourage the development of the domestic software sector should be scrapped. It stated that gaming should follow the same tax regulations as other companies and that the industry should be “psychologically prepared” for this.

Tencent and Netease shares plummeted earlier this week when Chinese state media referred to online gaming as “opium” in an article that was quickly removed and reposted with a new headline and no use of the word.

The broader Hang Seng index in Hong Kong fell 0.84 percent to 26,204.69. The Shanghai Composite in mainland China dropped 0.31 percent to 3,466.55, while the Shenzhen component dropped 0.786 percent to 14,872.23. The Nikkei 225 index in Japan rose 0.52 percent to close at 27,728.12, while the Topix index gained 0.39 percent to settle at 1,928.98. The Kospi in South Korea fell 0.13 percent to 3,276.13.

The S&P/ASX 200 index in Australia increased 0.11 percent to 7,511.10. According to data provided by Australia’s Bureau of Statistics on Thursday, the country had a trade surplus of nearly 10.5 billion Australian dollars (around $7.75 billion) in July. According to a Reuters survey, this was higher than estimates of a 10.45 billion Australian dollar trade surplus. Outside of Japan, MSCI’s broadest index of Asia-Pacific stocks fell 0.3 percent.

Investor mood in the region may have been impacted by the Covid crisis in China. As the delta form spreads across China, daily infections have increased again, prompting authorities to impose mass testing and extensive travel restrictions in some locations. In other events, Yonhap News, a South Korean news agency, said on Thursday that the strictest restrictions in the greater Seoul area are “highly likely to be extended again” as the number of cases continues to rise. The Dow Jones Industrial Average fell 323.73 points overnight to 34,792.67, while the S& P 500 fell 0.46 percent to 4,402.66. With a gain of 0.13 percent to 14,780.53, the Nasdaq Composite outperformed.

Jobs data from payroll processing firm ADP came in well below expectations, prompting Wall Street to react. The ADP private payroll survey revealed a 330,000 job gain in July, far less than the consensus expectation of 653,000. On Friday, the Labor Department will release the more carefully regarded nonfarm payrolls report.

Story By: Norvisi Mawunyegah