Hong Kong leads Asia shares down amid China tuition reformswritten by Bella Palmer
The selling extended from Friday, despite a strong lead from Wall Street, where all three main indexes closed at record highs
Asian markets mostly dropped on Monday, led by Hong Kong as Beijing further clamped down on China's tech firms at the weekend, while education companies were battered as the government unveiled sweeping reforms of the sector.
The broad losses across the region came amid the fast spread of the Delta coronavirus variant, which has sent cases spiking and forced some governments to reimpose lockdowns or other restrictive measures.
The selling extended from Friday, despite a strong lead from Wall Street, where all three main indexes closed at record highs with the Dow closing above 35,000 for the first time.
Investors eye possible market-moving events this week including the Federal Reserve's latest policy meeting, US economic growth data, and earnings from some of the world's biggest firms including Apple and Amazon.
They will also be keeping tabs on a meeting between US Deputy Secretary of State Wendy Sherman and Chinese Foreign Minister Wang Yi later in the day. The talks come at a time of increasingly strained relations between the superpowers, which have cracked heads over a range of issues including technology, Hong Kong and human rights.
Hong Kong dipped over three percent with education companies hammered after China on Saturday unveiled reforms that will massively change the way they do business.
Beijing said the sector had been "hijacked by capital", adding that it would prevent firms that teach school curriculums from making a profit, raising capital or going public.
According to consultancy and research firm L.E.K. Consulting, China's private education sector was worth $260 billion in 2018, driven by a hyper-competitive kindergarten-to-university education system in oversubscribed cities.
JP Morgan Chase analysts said it was uncertain whether firms could continue to be traded on stock markets under the new regime, adding that "in our view, this makes these stocks virtually un-investable".
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