Reuters - Asia stock indexes fell to seven-month lows Tuesday, led by a third straight session of heavy selling of China internet issues while bond and currency markets clung to tight ranges ahead of the U.S. Federal Reserve policy meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.97% to its lowest since December having slid 2.45% the previous day.
The Hong Kong benchmark fell 2.84% Tuesday, its third day of declines, with the Hang Seng Tech index down 6.46% to its lowest since its inception in July 2020. It has fallen around 14% in three days and has lost 41% from a February peak.
Big decliners included Meituan and Alibaba, whose shares fell 12.7% and 5.5% respectively. Both were down for the third successive day with investors expecting the companies' food delivery arms to be affected by new regulations guaranteeing workers above minimum pay.
In onshore markets, China blue chips dropped in afternoon trading, falling 2.93% after closing at their lowest since December Monday thanks to regulatory crackdowns in the education and property sectors.
"The market seems to be uncertain whether there will be more policy changes for fintech, social media platforms, delivery platforms and ride hailing platforms," Iris Pang, chief economist for Greater China at ING, said.
"Each has their own issue and faces different regulatory actions, so the market is looking for 'which technology sub-sector will be next?'"
Elsewhere in Asia, investors were more optimistic, with Japan's Nikkei rising 0.49% and Australia shares closing up 0.46%.
Other markets were set to open lower with S&P 500 futures dipping 0.21%, Eurostoxx 50 futures down 0.09% and FTSE futures off 0.19%.
U.S. corporate earnings and the Federal Reserve's monetary policy meeting were also on investors' minds.
"It's profits and the Federal Reserve. The next couple of days are going to be monumental as everyone tries to figure out how strong corporate fundamentals are at the moment and in what context that is happening in terms of the economic outlook and policy settings," said Kyle Rodda, market analyst at IG Markets.
Alphabet Inc., Apple Inc. and Microsoft Corp. are set to publish quarterly results late Tuesday, with Amazon.com Inc.'s due later in the week.
In addition, the Federal Reserve will begin its two-day meeting Tuesday with investors set to scrutinize a statement and news conference from chairperson Jerome Powell late Wednesday.
They will be looking to see how the central bank will balance fast-rising prices with the complication of increased coronavirus infections.
All three main U.S. stock indexes closed at record highs for a second straight session Monday.
However, the approaching Fed meeting kept moves in other asset classes to a minimum.
The dollar hovered around its recent peak during Asia hours, the Aussie dollar weakened and sterling gained on worries about a worsening Covid-19 situation in Sydney compared with a decline in new daily cases in the UK.
U.S. Treasury yields wobbled in Asia trade Tuesday following a choppy Monday but ended little changed.
The yield on benchmark 10-year Treasury notes was last 1.2795% compared with its U.S. close of 1.276% while the two-year yield touched 0.2134% compared with a U.S. close of 0.196%.
Gold was slightly lower, with the spot price trading at $1,794.5 per ounce, while U.S. crude ticked up 0.31% to $72.13 a barrel.
Bitcoin dropped to around $37,000 from a Monday peak of $40,581 after Amazon.com offered a qualified denial of a weekend news report that said it was preparing to accept cryptocurrencies.
