© Reuters.

By Gina Lee

Investing.com – Asia Pacific stocks were mostly down on Wednesday morning, following the downward trend set by their U.S. counterparts. A crackdown in China from earlier in the week continues to have a ripple effect, while the latest U.S. megacap technology earnings were mixed.

Japan’s fell 1.16% by 10:39 PM ET (2:39 AM GMT).

South Korea’s inched down 0.07%. Data released earlier in the day said that fell to 103.2 in July, lower than the 110.3 figure from the month before.

In Australia, the was down 0.54%, as the second-quarter consumer price index (CPI) grew a better-than-expected 0.8% , and 3.8% . The data, released earlier in the day, also said the trimmed mean CPI grew 0.5% and 1.6% .

Hong Kong’s rose 0.83%, while China’s was down 0.50% and the slid 1.61%.

While shares rose in Hong Kong on Wednesday, passing the 1% mark earlier in the session, caution remained as the impact of a Chinese crackdown continued to be felt. The crackdown, on lucrative sectors including tech and education, is already raising questions on how much further it will extend to curb big companies.

and continued falling in the Asian session. The weakened, and China’s sovereign bonds also retreated.

U.S. shares pared losses following the Nasdaq 100’s biggest fall in more than two months as well as drops in other major American equity indexes. U.S. Treasuries got a boost from both investors’ flight to quality thanks to a China selloff and a solid auction of its 5-year auction.

The sharp drop in Chinese and Hong Kong shares continued to be of concern to investors, adding to worries about the surge in COVID-19 cases globally and its impact on the economic recovery.

“The turmoil in tech stocks in China is finally bleeding into U.S. tech stocks,” Susquehanna International Group co-head of derivatives strategy Chris Murphy told Bloomberg.

“I am concerned investors will lighten up in general” after major tech earnings heading into “a seasonably weak period for equities,” he added.

Although corporate earnings have given U.S. shares a helping hand so far during the week, the most recent results were mixed. While Apple Inc. (NASDAQ:) and Microsoft Corp . (NASDAQ:) saw their shares fall in extended trading over concerns about slower growth, Alphabet Inc. (NASDAQ:) shares rose thanks to Google’s strong sales.

Facebook Inc . (NASDAQ:) and Amazon.com Inc. (NASDAQ:) will also report earnings later in the week.

Investors also await the , which will be handed down later in the day, where clues on the central bank’s timeline for asset tapering and interest rate hikes are awaited. U.S. second-quarter data will follow on Thursday.

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